Overseas Bank Branches Can Refinance ECBs, Says RBI

Overseas Bank Branches Can Refinance ECBs, Says RBI

The Reserve Bank of India (RBI) said that Indian banks’ subsidiaries, as well as branches that are located offshore, have been granted the permission to refinance external commercial borrowings (ECBs) of the AAA-rated private and public sector firms.

The decision is expected to not only expand the overseas credit market for the Indian banks but also bring down the corporate borrowing costs as well.

Previously, Indian lenders were allowed to finance dollar loans but barred from refinancing the same in the foreign countries as a preventive measure against the foreign currency risks.