In order to support the continuously depreciating Indian currency, the Reserve Bank of India (RBI) has notified the governmental proposal of opening up the overseas borrowing route for several sectors the RBI said that “Considering the developments in the global financial markets, it has been decided that the existing scheme of buyback/repayment of FCCBs under the approval route which expired on March 31, 2013 may be continued till December 31, 2013 and shall stand discontinued thereafter”.
ECB window for financing 3G-spectrum rupee loans, which are still outstanding in telecom operator’s books of accounts, will be open up to March 31, 2014. RBI has also allowed companies to finance the spectrum allocation by way of foreign currency borrowing. Aviation companies can now raise working capital through foreign currency loans or bonds. However they are not allowed to borrow loans in renminbi (RMB), the official currency of the People's Republic of China because the limits remained unutilized so far. As a result, the scheme of ECB in renminbi has been decided to end up from the date of issue of this circular. Higher inflows through foreign currency borrowing will help the rupee gain strength against dollar, which has lost over 8% in this year.
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