The Reserve Bank has liberalised the norms governing foreign borrowings for infrastructure creation “in consultation with the Government”. As per the notification, the minimum average maturity requirement for ECBs (external commercial borrowings) in the infrastructure space raised by eligible borrowers has been reduced to three years from earlier five years.
Additionally, the average maturity requirement for mandatory hedging has been reduced to five years from earlier ten years. The move comes amid concerns surrounding the availability of funds following a liquidity squeeze and the difficulties being faced by non-bank lenders, especially those facing asset liability issues due to heavy reliance on short-term funding for long-term assets.
Source- The Hindu Business Line
Static/Current Takeaways Important For IBPS PO Mains Exam 2018:
- RBI Governor: Urjit Patel (24th), Headquarters: Mumbai, Established: 1st April 1935.