ECB norms to be eased

NEW DELHI, DECEMBER 14: The ministry of finance is likely to remove all restrictions on how funds raised from the European Commercial Borrowing (ECB) can be used. This was approved of by the High Level Committee last week, and is now pending with Finance Minister Yashwant Sinha. Since this is only an administrative function, it does not have to go to the Union Cabinet for clearance.

Currently, proceeds from ECBs can be used only for importing capital goods, paying of services contracted from overseas, and for the rupee-related portion of capital goods payments. It is now proposed that these restrictions be done away with completely, except in two sectors, real estate and stock-market related activities.

The minimum maturity for repayment of ECBs will, however, continue to remain at 5 years.

The HLC comprised of Dr EAS Sarma who heads the Economic Affairs department, B.K. Chaturvedi who is Secretary in charge of ECBs, chief economic advisor Dr Shankar Acharya, and J. Bhagwati who is the joint secretarycapital markets.