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Relaxation for ECB borrowers amid pandemic
Mumbai, April 7 - The Reserve Bank of India (RBI) has relaxed the period of external commercial borrowing (ECB) proceeds in terms deposits.
Post the decision, unutilised ECB proceeds drawn down on or before March 1, 2020 can be parked in term deposits with AD Category-I banks in India, prospectively up to March 1, 2022.
Under the extant ECB framework, ECB borrowers are allowed to place ECB proceeds in term deposits with AD Category-I banks in India for a maximum period of 12 months.
"In view of the difficulty faced by borrowers in utilising already drawn down ECBs due to Covid-19 pandemic induced lockdown and restrictions, it has been decided to relax the above stipulation as a one-time measure, with a view to provide relief," the RBI said in its Statement on Developmental and Regulatory Policies.
In another decisions, the central bank has decided to increase the limit of outstanding balance in Prepaid Payment Instruments (PPI) with full KYC compliance from the current level of Rs 1 lakh to Rs 2 lakh.
The decision is aimed at incentivising the migration of PPIs to full KYC.
To promote optimal utilisation of payment instruments (like cards, wallets), and given the constraint of scarce acceptance infrastructure (like PoS devices, ATMs, QR codes, bill-payment touch points), the RBI has been stressing on the benefits of interoperability amongst the issuing and acquiring entities alike, banks or non-banks.
The guidelines issued in October 2018 enabled interoperability, albeit on a voluntary basis, insofar as the PPIs were full KYC (they met all Know Your Customer requirements). Despite a passage of two years, migration towards full KYC PPIs, and therefore interoperability, is not significant, it said.
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