The RBI has issued circular No. 32 dated 24th Nov 2015 revising the regulations related to External commercial borrowings. There are lot of key changes brought for ease of obtaining foreign funds by Indian parties. The list of eligible borrowers have been increased. the list of lenders from which the ECB can be taken, have been increased. The end use restrictions have mostly been removed with only the small negative list of end-use restrictions for which it cannot be used……therefore in the Foreign Funds world now, we may say that Negative is the new positive.
ECB is basically a loan availed by an Indian entity from a nonresident lender
Most of these loans are provided by foreign commercial banks and other institutions
It refers to commercial loans availed from non-resident lenders with a minimum average maturity of 3 years
An external commercial borrowing (ECB) is an instrument used in India to facilitate Indian companies to raise money outside the country in foreign currency. The government of India permits Indian corporates to raise money via ECB for expansion of existing capacity as well as for fresh investments.
The RBI has issued circular No. 32 dated 24th Nov 2015 revising the regulations related to External commercial borrowings. There are lot of key changes brought for ease of obtaining foreign funds by Indian parties. The list of eligible borrowers have been increased. the list of lenders from which the ECB can be taken, have been increased. The end use restrictions have mostly been removed with only the small negative list of end-use restrictions for which it cannot be used……therefore in the Foreign Funds world now, we may say that Negative is the new positive.
ECB is basically a loan availed by an Indian entity from a nonresident lender
Most of these loans are provided by foreign commercial banks and other institutions
It refers to commercial loans availed from non-resident lenders with a minimum average maturity of 3 years
An external commercial borrowing (ECB) is an instrument used in India to facilitate Indian companies to raise money outside the country in foreign currency. The government of India permits Indian corporates to raise money via ECB for expansion of existing capacity as well as for fresh investments.
Objectives & Agenda :
External Commercial Borrowings (ECB) are commercial loans raised by eligible resident entities from recognised non-resident entities. The objective of this Webinar is to understand the regulations laid down for the purposes of ECBs. We shall discuss the parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, and other such conditions relating to ECBs. We shall also look at relevant Statistics.
Will the new ECB frameworks change the borrowing strategies for Indian Corpor...SAS Partners
- Understand the basics of the revised overseas borrowing framework
- Enlighten the companies about the new avenues of capital flow.
- Evolve various reporting mechanisms and the consequences of violation
- The implication of revised framework from Banker’s perspective.
Financing Options for foreign companies in IndiaSAS Partners
Various funding options available for foreign investors to infuse the funds to their Indian investments. External Commercial Borrowing is one among the options which became highly attractive and beneficial to both the investors as well as the Indian entities pursuant to the recent liberalisation of policy. Corporates can broaden their funding plans considering the company-specific requirements.
Kotak Mahindra_ The Strategic Shift from NBFC to BankMANTHAN CHAUHAN
How Kotak Mahindra shifted his 'tag' from NBFC (Non Banking Financial Company) to Bank is briefly explained in this presentation with help of small case study and question and answers based on it.
what is the major difference between NBFC and bank,their related companies act and Banking acts are also explained
in it.
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
Objectives & Agenda :
External Commercial Borrowings (ECB) are commercial loans raised by eligible resident entities from recognised non-resident entities. The objective of this Webinar is to understand the regulations laid down for the purposes of ECBs. We shall discuss the parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, and other such conditions relating to ECBs. We shall also look at relevant Statistics.
Will the new ECB frameworks change the borrowing strategies for Indian Corpor...SAS Partners
- Understand the basics of the revised overseas borrowing framework
- Enlighten the companies about the new avenues of capital flow.
- Evolve various reporting mechanisms and the consequences of violation
- The implication of revised framework from Banker’s perspective.
Financing Options for foreign companies in IndiaSAS Partners
Various funding options available for foreign investors to infuse the funds to their Indian investments. External Commercial Borrowing is one among the options which became highly attractive and beneficial to both the investors as well as the Indian entities pursuant to the recent liberalisation of policy. Corporates can broaden their funding plans considering the company-specific requirements.
Kotak Mahindra_ The Strategic Shift from NBFC to BankMANTHAN CHAUHAN
How Kotak Mahindra shifted his 'tag' from NBFC (Non Banking Financial Company) to Bank is briefly explained in this presentation with help of small case study and question and answers based on it.
what is the major difference between NBFC and bank,their related companies act and Banking acts are also explained
in it.
NON PERFORMING ASSETS – NEED FOR PRAGMATIC & PRACTICAL REGULATORY FRAMEWORK Neha Sharma
The Reserve Bank of India, Indian Banks Association, almost all Public Sector Banks and the Indian businesses are deeply concerned about significant rise in nonperforming assets during last one year. The Indian economy has been passing through unprecedented turbulent times. Many important sectors of the economy have been adversely affected.
The Reserve Bank of India (RBI) has formulated the framework for External Commercial Borrowings by Startups. The Banking Regulator vide RBI circular , dated 27 October, 2016 has now permitted Startup Enterprises to access loans under ECB framework. The said Article provides complete details of the circular and also the personal views of the Author.
NATION UNDER ANGUISH - ACRIMONIOUS ENVIRONMENT Neha Sharma
The recent announcements of election results are historic and has brought to light serious concerns of the nation, the economy, society and most importantly public at large about the current political as well as economic state of affairs. This is very clear from active involvement and a record turnout of voters for the election.
The issues of proper Financial Management and Corporate Governance have taken a centre stage. The Public Sector Banks as well as Private Sector Banks are witnessing acute rise in nonperforming assets, moving up to 4.6% in March, 2015, whereas stressed advances have increased to 11.1% of the total advance, from 8% about 2 year ago. The major reasons as per a research of a large sample are as follows:
Export Import Banking … providing financial assistance to exporters and importers, and … functioning as the principal financial institution for coordinating the working of institutions engaged in financing export and import of goods and services with a view to promoting the country's international trade...
Term finance institutions or Developmental Finance Institutions in IndiaAnshikaSingh141
TERM FINANCE INSTITUTIONS / DFIs IN INDIA
Topic: Turning Down of Term Finance Institutions in India, a Boon or a Bane?
The basic objectives for Term Finance Institutions or Developmental Financial Institutions to be set up in our country was to provide long term finance, conduct project appraisals and finance projects with new and advanced technology. The major areas of focus were the industrially backward regions as DFIs were strategically set up to bring about and promote industrial development as well as regional development in the country. The Various DFIs and Term finance Institutions , It's history and breakdown are mentioned. The Changing situation and operational efficiency of DFIs before and after the Financial policies, Economic Reforms put forth by the RBI in 1991 is discussed in this document. Most importantly, the Gaps observed after the setting up of the term finance institutions / DFIs are explained in brief.
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The goal of the demonetization move in India is to make the economy stronger and eliminate the parallel cash economy which is unaccounted and untaxed. While this can impact the GDP negatively in the short term, it should have positive long term consequences. For e-commerce companies, which already have a digital payments system in place, it should lead to higher online payment and eventually eliminate the painful cash on delivery option. However, in the short term, witness a decline in GMV from India as the economy adjusts to the “new normal”.
Msme funding – Opportunities & Challenges (Part 5)Resurgent India
In India, the preferred mode of finance is either self or other sources. This further complicates the situation, as with these sources an enterprise cannot challenge the increasing competition
Funding Sme – MSME FINANCE – DEMAND & SUPPLY - Part - 9Resurgent India
The present domestic market conditions do not provide enough opportunities for the MSME sector for raising low cost funds. To improve the flow of credit there is a need to provide low cost finance to the MSME sector, which has limited working capital and is dependent exclusively on finance from public sector banks. The cost of credit in the Indian MSME sector is higher than its international peers. A transparent credit rating system, simplification/reduction in documentation for accessing finance, providing interest rate subvention to the MSME sector must be taken into consideration in order to maintain the growth of the MSME sector.
Funding Sme – The Challenges And Risk Within - Mezzanine Financing - Part - 8Resurgent India
Business owners need finance in order to invest but they want to retain control of their business and not give up valuable equity. For MSMEs the financing options are limited and private equity investors are usually interested in larger companies, while business angel investors are more active in start-ups. Furthermore, conventional bank lending is often not available for projects that could be classified as speculative. That’s where mezzanine finance comes in. Mezzanine finance is a fairly well-known type of funding, which sits between traditional bank debt and equity and it is exactly what many MSMEs need.
Funding Sme – The Challenges And Risk Within - Alternative financing sources ...Resurgent India
Securitization of Trade Credit: Trade credit is an important source of financing for MSMEs, as they sell on credit to their large customers and then wait for long periods for payment. If these receivables (trade credit) could be packaged as a securitized asset, which would essentially be a commercial paper with the credit rating of the large firm, it could help MSMEs reduce their investment in working capital and their need for finance significantly. The credit worthiness of a typical MSME would also improve, qualifying it for greater bank funding. Though the securitization process which is similar to factoring, could be more cost-effective than bank funding, factoring, and letters of credit.
Funding Sme – The Challenges And Risk Within - MSME FUNDING - NEED FOR ALTERN...Resurgent India
Finance is the lifeline of any enterprise. India has one of most extensive banking networks in the world. Despite, a considerable expansion of the banking infrastructure during the recent years, the provision of finance to grassroot level businesses, scattered across the nation, still remains an enormous challenge. Going ahead, it is also observed that Indian MSMEs have limited access to finance. Majority of the MSMEs operates on the funds of its promoters, thus limiting its growth. The limited or nonavailability of institutional finance at affordable terms is also hindering innovation in the Indian MSMEs.
Funding Sme – The Challenges And Risk Within - MSMEs CONTRIBUTION TO ECONOMY ...Resurgent India
Economy, with more than 31 million units employing more than 80 million persons. Further, productivity of the MSME sector has been improving significantly with fixed investments and employment growing consistently over the past few years. This is a direct indication of the efforts focused on this sector to integrate the workforce with technological enhancements to increase production. Fixed investments in the MSME sector between FY07 and FY12 has grown at a CAGR of 6.5 per cent and employment has grown by more than 6 per cent (y-o-y). Further, between FY07 and FY12, the sector’s total gross output grew at a CAGR of 6.3 per cent - reiterating the substantial contribution of the MSMEs to the Indian economy.
MSME Financing - Alternative Financing Instruments - Part - 14Resurgent India
Asset-based finance, which includes asset-based lending, factoring, purchase-order finance, warehouse receipts and leasing, differs from traditional debt finance, as a firm obtains funding based on the value of specific assets, rather than on its own credit standing. Working capital and term loans are thus secured by assets such as trade accounts receivable, inventory, machinery, equipment and real estate.
MSME Financing - Financing options available to MSMEs-II - Part -10Resurgent India
SME exchange
GOI and regulators have initiated several measures to address the low level of MSME financing through the capital markets. In March 2012, post issuance of SEBI guidelines, both BSE and NSE have set up institutional trading platforms in the SME segment to allow MSMEs to list and raise equity capital through venture funds, private equity and wealthy individuals, without initial public offerings.
MSME Financing - FINANCING MSME’S IN INDIA - Part - 7Resurgent India
Finance is life blood of any enterprise. But Indian MSMEs have always suffered the deficiency of this life blood, despite India having one of the most extensive banking networks in the world.
The present domestic market conditions do not provide enough opportunities for the MSME sector for raising low cost funds. To improve the flow of credit there is a need to provide low cost finance to the MSME sector, which has limited working capital and is dependent exclusively on finance from public sector banks. The cost of credit in the Indian MSME sector is higher than its international peers.
Indian Insurance Industry - Recent Industry Trends - Part - 5Resurgent India
Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company's insurance products to its clients. Globally, bancassurance has emerged as an important channel for distribution of insurance products. Various international studies have shown that a bancassurance strategy has indeed saved costs of insurance companies in the long run.
Indian Insurance Industry - Key Issues and Challenges - Part - 2Resurgent India
While a range of economic and financial reforms have helped the insurance sector grow, there remains a host of challenges which need to be addressed for harnessing the full potential of the sector:
DMIC will be an essential component of India’s future economic development. Implementation of DMIC Project requires huge investment for building up of infrastructure. It is envisaged that there will be primarily two categories of projects under the purview of state and central government agencies as:
DMIC Summit - Implementation and Institutional Framework - Part - 2Resurgent India
The effective implementation of such large and complex project, involving multiple states and agencies calls for immaculate planning and a robust administrative structure. In order to ensure that the traditional pitfalls of project implementation are overcome, it is proposed that a Project Development approach be adopted, wherein each facet of the project is rigorously developed from an engineering, financial, contractual, environmental and social perspective, along with interlinkages, on prioritization and selective basis and prior to commencement of implementation
DMIC Summit – Developing Hub for Investors - Overview & Approach - Part - 1Resurgent India
Delhi-Mumbai Industrial Corridor, from here on referred to as DMIC, is a multi-modal High Axle Load dedicated freight corridor connecting Delhi and Mumbai. It is a mega infrastructure project at USD 100 billion with technical and financial aid built in from Japan. The project is a flagship programme of Government of India with the aim of creating futuristic Industrial Cities by leveraging the "High Speed - High Capacity" connectivity backbone provided by Western Dedicated Freight Corridor (DFC).
Smart Cities - Global Case Studies - Part - 5Resurgent India
Greater Manchester is the single biggest economic area outside London with a residential population of 2.7 million. Greater Manchester is made up of 10 local authorities, of which the city of Manchester is the largest. The city of Manchester is located at the core of the Greater Manchester metropolitan area. Manchester’s core sectors are the business, finance and professional services sector which contribute ~40% to the city’s economy.
Smart Cities - Global Case Studies - Part - 4Resurgent India
Beijing, as the capital and political and cultural center of China, is a world famous ancient city and modern cosmopolis. Standing in the northwest of Beijing, Haidian District is important and famous for its science and technology, culture, education and tourism. It, consists of 22 sub -districts and 11 townships, has a total area of 426 square kilometers and a resident population of 1.5 million.
Empowering MSMEs - Benefits of Credit Rating in MSME - Part - 8Resurgent India
Approaching a credit rating agency is a good option for small and medium enterprises (SMEs) given the problems they face in seeking finance. Rating agencies assess a firm's financial viability and capability to honour business obligations, provide an insight into its sales, operational and financial composition, thereby assessing the risk element and highlights the overall health of the enterprise.
Empowering MSMEs - Skills Development of the MSME Sector - Part - 7Resurgent India
One of the thrust areas for increasing the competitiveness of MSMEs includes skills development. Skills development not only helps in improving productivity but also fosters entrepreneurship. Hence, it is imperative for the concerned governmental agencies, trade associations and MSMEs to come together and discuss on how to make training programmers relevant and attractive for MSMEs. The lack of human resources has been a long-standing problem faced by MSMEs in the country. Despite India’s large pool of human resources, the MSMEs continue to lack skilled manpower required for manufacturing, marketing, servicing, etc.
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The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Implicitly or explicitly all competing businesses employ a strategy to select a mix
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involves recognizing relationships between elements of the marketing mix (e.g.,
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(i.e., industry structure in the language of economics).
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2. External Commercial Borrowing
An External Commercial Borrowing (ECB), is a type of financing used in India to
help companies access overseas funds. It can include foreign-currency
commercial loans, as well as other instruments like fixed- and floating-rate
bonds, whose interest rates are capped by the Indian central bank. Typically,
ECBs are raised for import of capital goods, working capital, refinancing of
earlier ECBs, new projects, modernization/expansion, general corporate
purposes, etc. ECBs can be accessed under two routes –
(I) Automatic Route and (II) Approval Route
4. External Commercial Borrowing
Borrowers can raise ECB from internationally recognized sources, such as
(a) international banks,
(b) international capital markets,
(c) multilateral financial institutions (such as IFC, ADB, CDC, etc.) / regional
financial institutions and Government owned development financial
institutions,
(d) export credit agencies,
(e) suppliers of equipment’s,
(f) foreign collaborators and
(g) foreign equity holders
5. External Commercial Borrowing
The maximum amount of ECB which can be raised by a corporate other than
those in the hotel, hospital and software sectors, and corporates in
miscellaneous services sector is USD 750 million during a financial year.
Corporates in the services sector hotels, hospitals and software sector and
miscellaneous services sector are allowed to avail of ECB up to USD 200
million during a financial year.
6. External Commercial Borrowing
All-in-cost includes rate of interest, other fees and expenses in foreign
currency except commitment fee, pre-payment fee, and fees are payable in
Indian Rupees. The payment of withholding tax in Indian Rupees is excluded
for calculating the all-in cost. The existing all-in- cost ceilings for ECB are as
under: -
8. External Commercial Borrowing
Figures released by the RBI show that the companies based in India raised
USD 3,160 million in ECBs / FCCBs in June 2015, up 22 % compared to USD
2,591 million they had raised in January 2015. In 2014, Indian firms raised
USD 30.51 billion via ECBs, which is close to the USD 34.53 billion raised in
2013.
9. External Commercial Borrowing
54 companies borrowed a total of USD 806 million under the ECB automatic
route in June whilst 8 companies borrowed a total of USD 2,353 million
through the approval route bringing the total to USD 3,160 million for the
month of June, 2015. The figures released by the RBI show that among the
highest borrowers through the automatic route were Reliance Utilities and
Power Pvt. Ltd, at USD 300 million for new projects followed by IDFC Ltd at
USD 200 million for refinancing an earlier ECB and Reliance Industries Ltd USD
166 million also for refinancing an earlier ECB.
10. External Commercial Borrowing
Overseas borrowings by Indian companies have been on the rise as firms
sought to take advantage of the lower cost of capital in markets like the US
and Europe. Foreign investors continue to be positive on Indian markets, due
to prospects of growth under a stable government. As a result, companies do
not find it difficult to secure loans from foreign investors.
11. External Commercial Borrowing
Some of the recent developments in the ECB space have been detailed below
–
• Over the last few months, driven by lower interest rates in the global
market, Indian companies are increasingly borrowing by way of ECBs. Further,
during this period, the interest rates also remained stable due to the easing of
the global crude prices and slow global growth. However, this trend may
change soon once the US Federal Reserve raises policy rates, which is
expected in either September or December 2015.
12. External Commercial Borrowing
• Recently, RBI allowed banks more power to restructure ECBs of companies.
Banks can now modify the draw-down and repayment schedules of the ECBs,
including change in the average maturity period and changes in the all-in-
cost. Banks are now allowed to change the ECB loan from one company to
another in case of reorganization or merger. For this, earlier the companies
had to approach the RBI but now with banks having the power to make these
changes, companies will find it easy to restructure and transfer their ECB
loans
13. External Commercial Borrowing
• Recently, in an attempt to relax norms to raise money via ECBs, the RBI has
allowed firms in the manufacturing, hospitals, infrastructure, hotels, and
software sectors to raise foreign capital from foreign/indirect equity holders
without its approval. As per the existing policy, ECBs from direct foreign
equity holders (FEHs) are considered both under the automatic and the
approval routes. However, ECBs from indirect equity holders and group
companies and ECBs from direct FEH for general corporate purpose are
allowed under the approval route.
14. External Commercial Borrowing
• Recently, the RBI issued a draft framework on issuance of Rupee linked
bonds overseas. As per the new proposal, the Indian corporates eligible for
raising ECBs will also be able to raise funds overseas by issuing Rupee linked
bonds. By allowing firms to sell rupee- denominated bonds overseas will open
up another avenue for fund raising by Indian companies and help them raise
debt without taking on the currency risk typically associated with borrowings
abroad. The cost of hedging the currency risk involved in foreign currency
borrowings takes away part of the advantage of lower borrowing costs.
Allowing companies to issue rupee-denominated bonds will transfer any
currency risk to the investor rather than the seller. While the move could
potentially open up a new pool of investors for Indian companies to tap, the
benefits may initially be restricted to large high-rated corporate entities that
have an established track record in overseas bond markets.