Mumbai: Top industry body Assocham on Tuesday requested the Reserve Bank to allow further relaxations in the external commercial borrowings (ECB) regime for Indian corporates.
Among other measures suggested to the apex bank are delinking of ECB limits from the networth of a company wherein the present cap of 50 percent is lifted, Assocham Senior Advisor Jyotiromy Jain told reporters after a meeting with RBI Governor D Subbarao at Mumbai.
The meeting assumes importance as over 50 companies have USD 5 billion ECB redemption due before December. Rating agency S&P in a recent report said nearly half of these companies would go for an extension, which would involve an additional USD 700 million interest outgo.
Additionally, the lobby group has sought a relaxation in present rules wherein borrowers have to hedge their entire chunk of ECBs, Jain said, stressing on the need to bring down the hedged component to 50 percent.
Jain, who was part of an Assocham delegation led by Rajkumar Dhoot and D S Rawat, which met the RBI Governor, said companies having overseas earnings should be given a leeway as they have foreign earnings in case the bets go awry.
Similarly, in case a company has the ability to repay, through its foreign earnings, it must also be allowed to convert its rupee loans into ECBs, Jain said.
Dhoot claimed Subbarao welcomed the suggestions and assured the delegation that their request will be looked into.
As part of its move to boost investor confidence, the RBI took a host of measures last month, including raising ECB limits for the country's corporates.
Assocham also requested for an interest subvention of 2 percent for loans to small businesses like the ones given to the agricultural sector.
Further, it has sought sentiment-reviving measures like an immediate cut of 1 per cent each in the key lending rate and the cash reserve ratio in the next policy, among other things.


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