The Reserve Bank of India on Thursday eased refinancing procedure of external commercial borrowings where borrowers can repay any existing debt by raising fresh ECB at lower all-in-cost but subject to the condition that the outstanding maturity of the original loan is maintained.
It has been decided to simplify the procedure by delegating powers to the banks to approve even those cases where the AMP of the fresh ECB is exceeding the residual maturity of the existing ECB under the automatic route subject to the following conditions, RBI said.
RBI said both the existing and fresh ECBs should be in compliance with the applicable guidelines, all-in-cost of fresh ECB should be less than the all-in-cost of existing ECB and consent of the existing lender should be available.
It further said the overseas branches or subsidiaries of Indian banks will not be permitted to extend ECB for refinancing an existing ECB.
And borrower should not be in the default / caution list of RBI and should not be under the investigation of the Directorate of Enforcement (DoE), it said.