Announcing a major relief to Indian players in the infra sector and banks, the RBI recently reduced the minimum average maturity requirement for ECBs raised by eligible borrowers in the infrastructure space from existing five years to three years, the RBI said in an official statement, elaborating that ECBs with minimum average maturity period of three to five years in the sector and will have to meet 100% mandatory hedging requirement. The bank further clarified that ECBs falling under the aforesaid revised provision but raised prior to the date of this circular will not be required to mandatorily roll-over their existing hedges. This follows a meeting spearheaded by PM in which the government had insisted that mandatory hedging condition for infrastructure loans would be reviewed shortly. In its notification, the central bank said the minimum maturity profile of the borrowings should be three years and five years, and the overall cap under the scheme would be $10 billion.
