The government is considering a further relaxation in the external commercial borrowing (ECB) norms. The Finance Ministry is consulting the Reserve Bank of India (RBI) to work out the new policy. Says a senior official: “Given the liquidity crunch, we feel there is case for further easing of ECB norms.” While the government has recently relaxed overseas borrowings limits, the restrictions imposed in 2007 to control surging dollar inflows have not been rolled back completely.
Now, the government plans to revert to last year’s levels. Presently, companies outside the infrastructure sector can borrow a maximum of $50 million (Rs 240 crore). Infrastructure companies can borrow up to $500 million (Rs 2,400 crore), subject to RBI approval.