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Govt rules out ECB policy change for now

Our Bureau

New Delhi , Oct. 14

THE Government has decided to continue with its play-it-safe policy with regard to allowing corporates to access the External Commercial Borrowings (ECBs) window for sums beyond $50 million.

A high-level committee, comprising top officials from the Finance Ministry and the Reserve Bank of India (RBI), which met here today to review the ECB policy for the next quarter, decided not to alter "for the time being" the existing policy of actively discouraging ECBs in view of the continuing surge in the country's foreign exchange reserves.

A number of ECB proposals of leading corporates have been `put on hold', which includes not just individual amounts beyond $100 million (that are approved by the Finance Ministry), but also those between $50 million and $100 million, for which the RBI is the sanctioning authority.

"We see no change in the overall macroeconomic scenario that warrants a change in the existing policy," officials said, while emphasising that the Government had only `put on hold' and not rejected any ECB proposal.

Among the proposals currently `on hold' include the $500 million amount of Reliance Industries Ltd.

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