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<ul><li>All companies that are eligible for <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> can now raise funds from overseas creditors under the automatic route. </li><li>More importantly, all sector-wise limits have been scrapped, with a blanket overseas borrowing cap of $750 million on an annual basis for all companies. </li><li>The move is expected to alleviate a domestic <keyword id="6355375" type="DEFINITION" weightage="20" keywordseo="Liquidity">liquidity</keyword> crisis, and prop up the rupee by attracting more foreign funds to Indian markets. </li></ul>Following pressure from the central government, the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) has further eased norms that govern the borrowing of overseas funds by domestic entities. The move is expected to alleviate a domestic liquidity crisis, and prop up the rupee by attracting more foreign funds to Indian markets. This, in turn, will allow companies to support their expansion plans and also sustain <keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword> growth as the government moves into election season. India’s central bank outlined the changes in <a href="https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=46031">a circular </a>on January 16th, explaining that they would improve the “ease of doing business” in the country. In addition to banks and financial institutions, all companies that are eligible for foreign direct investment can now raise funds from overseas creditors under the automatic route. Even NGOs, port trusts and cooperatives have been allowed to take advantage of this fundraising mechanism. The RBI has also done away with the original four-tiered system of borrowing, which categorises bonds based on maturity time, and divided the scheme into two segments- one for rupee-denominated bonds and one for bonds in all other currencies. More importantly, all sector-wise limits have been scrapped, with a blanket overseas borrowing cap of $750 million on an annual basis for all companies. In addition, the minimum term limit for all instruments has been set at three years. Quite simply, India’s commercial banks don’t have the cash-on-hand to boost credit growth to the corporate sector. Burdened with non-performing loans, their medium-term financial strength hinges on a few large resolutions under the Insolvency and Bankruptcy Code. In an interview with ET, Rashesh Shah, the former president of FICCI, said that India would have to record a credit growth of <a href="https://economictimes.indiatimes.com/markets/expert-view/at-least-15-16-credit-growth-needed-to-maintain-investment-demand-rashesh-shah/articleshow/67089690.cms">at least 15%</a> to sustain economic growth. Credit growth came in at a <a href="https://www.business-standard.com/article/economy-policy/india-facing-a-cash-crunch-as-bank-credit-growth-slows-down-in-sept-y-o-y-118102600135_1.html">12.5% </a>on a year-on-year basis as of September 2018. To make matters worse, India’s shadow banks, which have stepped in to fill the funding gap in the last few years, have been facing a cash crunch of their own following a series of defaults by IL&amp;FS, India’s largest infrastructure lender. Not will the easier overseas borrowing norms allow India’s commercial banks to raise funds from abroad to support their domestic lending operations, but it will also enable companies to raise their own debt from overseas investors without having to turn to domestic banks. The RBI has, however, decided to retain some curbs on the overseas borrowing programme. Companies cannot raise debt from overseas through this route for the purpose of real estate purchases, investment in domestic equity markets and the repayment of rupee-loans. In addition, the cap on all <keyword id="6495102" type="UNKNOWN" weightage="20" keywordseo="external-commercial-borrowing">external commercial borrowing</keyword> will continue <a href="https://www.livemint.com/Money/JqMJEdBmtursAu7O8jTgoL/RBI-limits-total-outstanding-ECBs-to-65-of-GDP.html">to be 6.5% of GDP</a> . SEE ALSO: <a href="https://www.businessinsider.in/after-weeks-of-tension-the-reserve-bank-of-india-gives-in-to-some-of-the-central-governments-demands-while-retaining-its-independence/articleshow/66705908.cms">After weeks of tension, the Reserve Bank of India gives in to some of the central government's demands while retaining its independence</a> A<a href="https://www.businessinsider.in/as-indias-shadow-banks-brace-for-a-tough-2019-the-central-bank-and-government-will-try-and-prevent-a-repeat-of-the-ilfs-crisis-by-solving-the-data-problem/articleshow/67419846.cms">s India’s shadow banks brace for a tough 2019, the central bank and government will try and prevent a repeat of the IL&amp;FS crisis by solving the data problem</a>

India just made it easier for companies to borrow money from overseas

<keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword>'s <keyword id="312455" type="General" weightage="20" keywordseo="EXTERNAL-DEBT" source="Orion">external debt</keyword> rose by 8.2 per cent to stand at $620.7 billion on March 31, 2022, compared to $573.7 billon on March 31, 2021. Out of this, 53.2 per cent of external debt was denominated in US dollars, the Indian rupee denominated debt was estimated at 31.2 per cent and was the second largest, according to the status report on India's external debt 2021-22, released by the <keyword id="47209" type="General" weightage="80" keywordseo="finance-ministry" source="Orion">Finance Ministry</keyword> on Monday. According to the report, external debt, as a ratio to GDP, fell marginally to 19.9 per cent as on March 2022 compared to 21.2 per cent of the year ago period. Foreign currency reserves, as a ratio to external debt, stood slightly lower at 97.8 per cent as on March 2022, compared to 100.6 per cent of the year- ago period. The long-term debt estimated at $499.1 billion, formed the largest chunk of 80.4 per cent, while the short-term debt, at $ 121.7 billion, accounted for 19.6 per cent of the total external debt amount. The short-term trade credit was predominantly in the form of trade credit (96 per cent) financing imports, the report added further. Commercial borrowings, <keyword id="11904949" type="General" weightage="80" keywordseo="nri" source="Orion">NRI</keyword>s deposits, short-term trade credit and multilateral loans, all accounted for 90 per cent of the total external debt. While NRI deposits marginally contracted during end-March 2021 and end-March 2022, commercial borrowings, short-term trade credit and multilateral loans, on the other hand, expanded during the same period. The rise in commercial borrowings, short-term trade credit and multilateral loans together was significantly larger than the contraction in NRI deposits, the report further said. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/marriage-is-a-sacrament-says-centre-to-sc-in-restitution-of-conjugal-rights-case/articleshow/94017818.cms">Marriage is a sacrament says Centre to SC in restitution of conjugal rights case</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/ondc-is-a-population-scale-initiative-to-democratize-e-commerce-jm-financial/articleshow/94017558.cms">ONDC is a population-scale initiative to democratize e-commerce: JM Financial</a>

India's external debt rose 8.2% in 2021-22 to $620 billion

Owing to country’s improving economic outlook, the Indian industry has raised $3.49 billion from <keyword id="116674" type="UNKNOWN" weightage="20" keywordseo="overseas-markets">overseas markets</keyword> last month, up 60.2% as against the period in 2013, according to a data released by the Reserve <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword> (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) on Monday. In November 2013, the domestic firms had raised $2.18 billion overseas in November. 
 
The RBI data on external commercial borrowing (ECB) showed that $1.52 billion was raised through the approval route, while $1.97 billion came through automatic route out of the total borrowings in November 2014. It also disclosed that as many as 64 companies raised money from automatic route and three firms raised via approval route. 
 
In the approval route category, RIL subsidiary Reliance Jio Infocomm raised $1 billion for refinancing of its earlier external commercial borrowing, Mumbai-based JSW Steel Ltd raised $500 million for refinancing of rupee loans and Daramic Battery Seperator India Pvt Ltd, a leading manufacturer and supplier of batteries, raised $SD 24.95 million to come up with new project. 
 The main borrowers in the automatic route category were <keyword id="173098" type="CITY" weightage="20" keywordseo="NTPC-Ltd">NTPC Ltd</keyword> and Reliance Jio Infocomm; these firms raised $500 million each for power project and refinancing of earlier ECB needs, respectively. 
 
For on-lending, Power Finance Corporation raised $250 million, Export-Import Bank of India raised $171.95 million for sub-lending and Sahara Hospitality Ltd raised $60 million for modernisation projects. 
 
Image: Economic Times

Indian Industry Raised $3.49 Billion From Overseas Markets In November

The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) on Wednesday announced a series of measures to boost foreign exchange inflows. The central bank said that it has taken the steps in order to further diversify and expand the sources of <keyword id="6358355" type="General" weightage="20" keywordseo="forex" source="Orion">forex</keyword> funding so as to mitigate volatility and dampen global spillovers. India's foreign exchange reserves stood at $593.3 billion as on June 24, 2022, supplemented by a substantial stock of net forward assets, it said. The RBI has exempted incremental Foreign Currency Non-Resident Bank (FCNR-B) and Non-Resident (External) Rupee (NRE) deposit <keyword id="127684" type="General" weightage="20" keywordseo="Liabilities" source="Orion">liabilities</keyword> for computation of Net Demand and Time Liabilities (NDTL) for maintenance of cash reserve ratio (<keyword id="35038" type="General" weightage="20" keywordseo="crr" source="Orion">CRR</keyword>) and statutory liquidity ratio (<keyword id="46197" type="General" weightage="20" keywordseo="SLR" source="Orion">SLR</keyword>) by the banks. This will be effective from the reporting fortnight beginning July 30, 2022 with reference base date of July 1. "This relaxation will be available for deposits mobilised up to November 4, 2022. Transfers from Non-Resident (Ordinary) (NRO) accounts to NRE accounts shall not qualify for the relaxation," the RBI said. It also decided to temporarily permit banks to raise fresh FCNR(B) and NRE deposits without reference to the extant regulations on interest rates, with effect from July 7, 2022. This relaxation will be available for the period up to October 31, 2022. The RBI also relaxed rules relating to foreign portfolio investment in debt by allowing all new issuances of government securities (G-Secs) of 7-year and 14-year tenors, including the current issuances of 7.10 per cent GS 2029 and 7.54 per cent GS 2036, under the Fully Accessible Route (FAR). It also decided that <keyword id="6362476" type="General" weightage="20" keywordseo="investments" source="Orion">investments</keyword> by FPIs in government securities and corporate debt made till October 31, 2022 will be exempted from the macroprudential short term limit - not more than 30 per cent of investments each in government securities and corporate bonds can have a residual maturity of less than one year. These investments will not be reckoned for the short term limit till maturity or sale of such investments. As part of the macroprudential framework under the medium term framework (MTF), foreign portfolio investors (FPI) can invest only in corporate debt instruments with a residual maturity of at least one year. The central bank has decided that FPIs will be provided with a limited window till October 31, 2022 during which they can invest in corporate money market instruments viz., commercial paper and non-convertible debentures with an original maturity of up to one year. The FPIs can continue to stay invested in these instruments till their maturity/sale. These investments will not be included for reckoning the short term limit for investments in corporate securities. According to the RBI, Authorised Dealer Category-1 (AD Cat-I) banks can utilise overseas foreign currency borrowings (OFCB) for lending in foreign currency to entities for a wider set of end-use purposes, subject to the negative list set out for external commercial borrowings (ECBs). The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets. This dispensation for raising such borrowings is available till October 31, 2022. As regards the external commercial borrowings (ECB) the RBI has temporarily increased the limit under the automatic route from $750 million or its equivalent per financial year to $1.5 billion. The all-in cost ceiling under the ECB framework is also being raised by 100 basis points, subject to the borrower being of investment grade rating. The above dispensations are available up to December 31, 2022. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/environment/news/monsoon-rain-wreaks-havoc-in-himachal-and-karnataka-orange-alert-in-gujarat/articleshow/92704563.cms">Monsoon rain wreaks havoc in Himachal and Karnataka, orange alert in Gujarat</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/macbook-air-with-m2-chip-will-go-on-sale-from-july-15/articleshow/92704253.cms">Apple’s MacBook Air with M2 chip will go on sale from July 15, pre-orders starting July 8</a>

RBI tries to boost forex reserves by easing NRI deposit norms

Mumbai, Feb 9 () Foreign borrowings of Indian companies fell over 45 per cent to USD 2.09 billion in December 2019 as compared to the year-ago period, according to the Reserve Bank data. Indian firms had raised USD 3.81 billion in December 2018, which included USD 37 million through issuance of masala bonds. Of the total money borrowed by domestic companies during December 2019, USD 1.2 billion was through the automatic route of external commercial borrowing (ECB) and USD 840 million via approval route of ECB. The remaining USD 55.98 million was raised through the rupee denominated bonds or popularly known as masala bonds. The borrowers taking the automatic route of ECB included HPCL-Mittal Pipelines (USD 262.5 million), HDFC Credila Financial Services ( USD 100 million), LIC Housing Finance (USD 200 million) and Toyota Financial Services India (USD 100 million), among others.Those who borrowed through the approval route were REC Ltd (USD 500 million) and Power Finance Corporation (USD 250 million), besides others. Cholamandalam Investment and Finance Company was the only company to have floated masala bonds overseas to raise up to USD 55.98 million for on-lending, as per RBI data. KPM RVK ANUANU

Indian cos' foreign borrowings down 45 pc to USD 2 bn in Dec'19

Mumbai, Jan 5 () Overall borrowings by India Inc from overseas markets grew 6.5 per cent to USD 2.12 billion in November 2019, the Reserve Bank data showed.
Domestic companies had borrowed over USD 1.99 billion in November 2018 from foreign sources.
Of the total foreign borrowing during the month, USD 2,11,53,22,022 was raised through the automatic route under the external commercial borrowing (ECB). 
No capital came in through the approval route, while the rest of USD 9,86,681 was by way of issuance of rupee denominated bonds (RDB).
The major borrowers in the automatic route of ECB were: Adani Transmission Ltd (USD 500 million for refinancing of rupee loans), Tata Motors Ltd (USD 400 million for rupee expenditure), Oil and Natural Gas Corporation (USD 300 million for new project) and JSW Steel Ltd (USD 250 million for refinancing of earlier ECB).
Among others, Home Credit India Finance raised USD 61.58 million for on-lending purpose, manufacturing firm Nipro India Corporation Private Ltd borrowed USD 52.1 million to carry out modernisation work, non-metallic mineral producer Owens-Corning (India) Private Limited raised USD 30 million for working capital needs, and Exxonmobil Services &amp; Technology Pvt Ltd borrowed USD 30 million for rupee expenditure.
Margdarshak Financial Services Limited, which is into micro finance business, except for insurance and pension funding, was the sole entity to raise the money by issuing the rupee bonds (popularly known as masala bonds). KPM MKJ

India Inc's overseas borrowing up 6.5% to USD 2.12 bn in Nov 2019

The country's <keyword id="20344433" type="General" weightage="100" keywordseo="forex-reserves" source="keywords">forex reserves</keyword> touched a <keyword id="19953076" type="General" weightage="20" keywordseo="record-high" source="keywords">record high</keyword> of <keyword id="22711333" type="General" weightage="20" keywordseo="USD-675-billion" source="keywords">USD 675 billion</keyword> on August 2, <keyword id="22204269" type="General" weightage="20" keywordseo="Reserve-Bank-Governor" source="keywords">Reserve Bank Governor</keyword> <keyword id="19913110" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="keywords">Shaktikanta Das</keyword> said on Thursday. The previous all-time high for the kitty was USD 670.857 billion on July 19 this year, and the last reported reserve was USD 667.386 billion as on July 26. Das said overall, the country's <keyword id="20811151" type="General" weightage="20" keywordseo="external-sector" source="keywords">external sector</keyword> "remains resilient" as indicated by an improvement in key indicators. "We remain confident of meeting our <keyword id="22711421" type="General" weightage="20" keywordseo="external-financing-requirements" source="keywords">external financing requirements</keyword> comfortably," he said in his statement after the review of the <keyword id="20104157" type="General" weightage="20" keywordseo="monetary-policy" source="keywords">monetary policy</keyword>. Das said <keyword id="20015748" type="General" weightage="20" keywordseo="foreign-portfolio-investors" source="keywords">foreign portfolio investors</keyword> turned net buyers in the domestic market from June 2024 with net inflows of USD 9.7 billion during June- to August 6, after witnessing outflows of USD 4.2 billion in April and May. Gross foreign direct investment (FDI) rose by more than 20 per cent in April-May 2024, while net FDI flows doubled during this period compared to the corresponding period of the previous year, the Governor said. External commercial borrowings by Indian entities moderated, but non-resident deposits were higher in April-May, he said.

India's forex reserves at record high of USD 675 billion, external sector resilient: RBI Governor Shaktikanta Das

The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) move to relax regulations to boost foreign exchange inflows will not have any material change in receipts, but certainly helpful in directional forex signalling to speculators, said <keyword id="141615" type="General" weightage="80" keywordseo="emkay-global" source="Orion">Emkay Global</keyword> Financial Services Ltd. Reacting to RBI's moves on Wednesday, Emkay Global in a report said: "While these measures to boost capital account are helpful, they may not have a material impact on flows. Nonetheless, they will still ease the pressure of the RBI to intervene to some extent." According to Emkay Global, with low forward premia, this mobilisation may still make some sense for banking entities. The timing of RBI's move coincides with the typically strong remittance/deposit season that comes with the beginning of the festive season. This can take the pressure off banks to raise domestic deposits amidst accelerating credit growth, and also somewhat cool-off domestic borrowing rates, Emkay Global said. The easing of all the available channels of foreign portfolio investors (<keyword id="725142" type="General" weightage="50" keywordseo="fpi" source="Orion">FPI</keyword>) investments in debt may not lead to material change in FPI flows given the free limits that are already available. However, the new tenors added in Fully Accessible Route (FAR) securities are fairly active. "Thirdly, the all-in cost ceiling under the <keyword id="60971" type="General" weightage="50" keywordseo="ecb" source="Orion">ECB</keyword> (external commercial borrowings) framework is also being raised by 100 bps, subject to the borrower being of investment grade rating, however we seek more clarity on this front as to whether it leads to any change in caps (from existing 450bps), and if it makes sense for domestic good investment-grade borrowers to borrow in foreign currency, except when they are facing a credit crunch back home," the report said. While it is debatable if these steps can lead to significant flows, they could be effective in preventing speculative attacks on the currency and giving directional policy signals to the markets, Emkay Global added. The key measures announced by RBI on Wednesday were: 1. Cash Reserve Ratio + Statutory Liquidity Ratio (CRR+ SLR) exemptions: Incremental FCNR Bank and Non-Resident External (NRE) deposit liabilities now exempt from <keyword id="626944" type="General" weightage="50" keywordseo="net-demand-and-time-liabilities" source="Orion">Net Demand and Time Liabilities</keyword> (NDTL) computation for maintenance of CRR and SLR. Transfers from Non-Resident Ordinary (NRO) accounts will not qualify for this relaxation. This relaxation is available till November 4, 2022. 2. Interest rates on FCNR and NRE deposits: Banks are temporarily allowed to raise fresh FCNR(B) and NRE deposits without having to adhere to the regulations on interest rates on these deposits. 3. FPI debt investment: Easing all the available channels of FPI investments: (i) All new issuances of 7-year and 14-year G-secs (including fairly active current issuances of 7.10 per cent GS 2029 and 7.54 per cent GS 2036 <keyword id="1351125" type="General" weightage="50" keywordseo="ato" source="Orion">Ato</keyword> be now covered under Fully Accessible Route (FAR). At present, 5-year, 10-year and 30-year tenors are covered. (ii) FPI investments in G-secs and corporate debt will not be subject to the short-term limit, i.e., not more than 30 per cent of investments in G-secs and corporate debt can have a residual maturity less than one year. (iii) FPIs can invest in commercial papers and non-convertible debentures with an original maturity of up to one year as against earlier mandate of at least one year. These investments will not be included as part of the short term limit on investments in corporate securities. 4. Foreign currency lending by banks: Banks can utilise overseas foreign currency borrowings (OFCBs) for lending for a wider set of purposes, not just export finance. The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets. 5. ECB limits: The limit for ECBs under the automatic route has been raised from $750 million to $1.5 billion per financial year. The all-in cost ceiling has also been raised by 100bps. The measures 2-5 above are valid till 31st October 2022, Emkay Global said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/stopped-russian-imports-in-april-says-essar-oil/articleshow/92714422.cms">Stopped Russian imports in April says Essar Oil</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/space/news/elon-musk-is-confident-that-humanity-will-reach-mars-in-our-lifetime/articleshow/92714414.cms">Elon Musk is confident that humanity will reach Mars in our lifetime</a>

RBI's moves to boost forex inflows could have an impact on domestic borrowing rates

<keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword> reported a <keyword id="143643" type="PERSON" weightage="20" keywordseo="current-account">current account</keyword> surplus of 0.9 per cent of <keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword> in the pandemic-hit FY21, as against a <keyword id="6420764" type="UNKNOWN" weightage="20" keywordseo="deficit">deficit</keyword> of 0.9 per cent in FY20, data released by the <keyword id="30067" type="COMPANY" weightage="20" keywordseo="RBI">RBI</keyword> showed on Wednesday. The country's current account deficit widened to USD 8.1 billion or 1 per cent of GDP for the March quarter, as against a surplus of USD 0.6 billion or 0.1 per cent of the GDP in the year-ago period and a deficit of 0.3 per cent in the preceding December quarter, as per the central bank data. The CAD, the gap between the country's overall foreign receipts and payments, is an important factor representing a nation's external sector's strength. The <keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> said the current account balance swung into the surplus territory on the back of a sharp contraction in the trade deficit to USD 102.2 billion from USD 157.5 billion in 2019-20. Net invisible receipts were lower in FY21 due to an increase in net outgo of overseas investment income payments and lower net private transfer receipts, even though net services receipts were higher than the year-ago period, it said. Despite the pandemic, the net foreign direct investment inflows at USD 44 billion were higher in FY21 than the USD 43.0 billion in 2019-20, the central bank added. Net foreign portfolio investments also increased by USD 36.1 billion in FY21 as compared to USD 1.4 billion a year ago, it said. External commercial borrowings by <keyword id="46431" type="COMPANY" weightage="20" keywordseo="India-Inc">India Inc</keyword> recorded an inflow of USD 0.2 billion as compared to USD 21.7 billion in 2019-20, the RBI data showed. There was an accretion of USD 87.3 billion to foreign exchange reserve on a balance of payments basis, it said. The current account deficit in the March quarter was higher primarily on account of a higher trade deficit and lower net invisible receipts than in the corresponding period of the previous year, the RBI said. Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to USD 20.9 billion, up by 1.7 per cent from the year-ago level. Net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to USD 8.7 billion from USD 4.8 billion a year ago, according to the data. The net FDI came at USD 2.7 billion during the March quarter as against USD 12 billion in the year-ago period. Net foreign portfolio investment (FPI) increased by USD 7.3 billion - mainly on account of net purchases in the equity market - as against a decline of USD 13.7 billion in Q4 FY20. Net external commercial borrowings to India was lower at USD 6.1 billion in the March quarter as compared to USD 9.4 billion a year ago, the RBI said. See also <a href="https://www.businessinsider.in/tech/apps/news/one-year-of-chinese-apps-ban-indian-alternatives-take-over-tiktok/articleshow/83943865.cms" data-type="tilCustomLink">One year of Chinese apps ban — Indian alternatives take over TikTok</a> <a href="https://www.businessinsider.in/cryptocurrency/news/chinas-oldest-crypto-exchange-exits-cryptocurrency-business-amid-government-crackdown-on-bitcoin-mining/articleshow/83953113.cms" data-type="tilCustomLink">China's oldest crypto exchange exits cryptocurrency business amid government crackdown on Bitcoin mining</a>

Jio’s fundraising spree and fall in imports help India clock the first current account surplus in 17 years

<keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword>'s external debt of $620.7 billion, as at end of March 2022, is sustainable and is being managed in a prudent manner, the <keyword id="144110" type="General" weightage="80" keywordseo="department-of-economic-affairs" source="Orion">Department of Economic Affairs</keyword>, under the Union Finance Ministry, said. In a recent report, the Department of Economic Affairs said the country's external debt continues to be sustainable and prudently managed. "As at end-March 2022, it stood at $620.7 billion, growing by 8.2 per cent over the level a year ago. External debt as a ratio to GDP (gross domestic product) was 19.9 per cent, while reserves to external debt ratio was 97.8 per cent," the report said. The sovereign debt at $130.7 billion rose higher by 17.1 per cent over its level a year ago, mainly because of additional allocation of special drawing rights (SDR) by the IMF during 2021-22. The non-sovereign debt, on the other hand, grew 6.1 per cent to $490 billion over the level as at end-March 2021. Experts had said that the external debt of $620.7 billion need not be a concern as $490 billion is non-government and the share of government is only $130.8 billion. Of the non-government debt, the share of non-financial corporations was about $250.2 billion. Further, the total debt of $620.7 billion as a percentage of gross domestic product (GDP) was 19.9 per cent and the debt service ratio was 5.2 per cent. Experts also said India cannot be compared with Sri Lanka that is in a severe economic crisis. The share of the central government in short term debt - maturing in a year's time- is only $7.7 billion out of the total $267 billion, experts had said. Commercial borrowings, <keyword id="11904949" type="General" weightage="80" keywordseo="nri" source="Orion">NRI</keyword> deposits, and short-term trade credit are the three biggest constituents of the non-sovereign debt, accounting for as much as 95.2 per cent. While NRI deposits declined by two per cent to $139 billion, commercial borrowings at $209.71 billion and short-term trade credit at $117.4 billion rose by 5.7 per cent and 20.5 per cent, respectively. According to the report, the debt vulnerability indicators continued to be benign. The debt service ratio fell significantly to 5.2 per cent during 2021-22 from 8.2 per cent during the previous year, reflecting buoyant current receipts and moderating external debt service payments. The debt service payment obligations arising out of the stock of external debt as at end of March 2022 are projected to trend downwards over the coming years. From a cross-country perspective, India's external debt is modest. In terms of various debt vulnerability indicators, India's sustainability was better than the Low-and Middle-Income Countries (LMICs) as a group and vis-a-vis many of them individually. According to the report, the US dollar continues to be the leading currency of denomination accounting for 53.2 per cent of the total as at end March 2022. Deposits in Non Resident (External) <keyword id="8182719" type="General" weightage="80" keywordseo="rupee-accounts" source="Orion">Rupee Accounts</keyword> (NR(E)RA), NRO accounts and <keyword id="725142" type="General" weightage="80" keywordseo="fpi" source="Orion">FPI</keyword> investments in Gsec and corporate bonds are among the components of India's external debt, denominated in Indian rupees. Indian rupee is the second leading currency of denomination with a lower share of 31.2 per cent of the total as at end-March 2022 than 33.3 per cent a year ago, reflecting erosion of outstanding FPI investments in G-Sec and corporate bonds ($50.1 billion from $51.4 billion as at end-March 2021) and balances under NRE accounts ($100.8 billion from $ 102.6 billion). Following the US dollar and the Indian rupee are the SDRs (6.6 per cent), the Japanese <keyword id="76265" type="General" weightage="80" keywordseo="yen" source="Orion">Yen</keyword> (5.4 per cent) and Euro (2.9 per cent). SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/delhi-liquor-shops-open-at-metro-station-premises/articleshow/93994229.cms">Delhi: Liquor shops open at Metro station premises</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/mistrys-body-to-undergo-autopsy-in-mumbai-pundoles-critical-but-stable/articleshow/93994156.cms">Mistry's body to undergo autopsy in Mumbai, Pundoles critical but stable</a>

India's external debt of $620bn is sustainable: Finance Ministry report

Mumbai, Nov 22 () The RBI on Friday expanded the scope of Special Non-Resident Rupee Accounts by permitting non-residents to open such accounts for rupee denominated overseas borrowings, trade credit and trade invoicing for popularising cross-border transactions in the domestic currency.
 Any person resident outside India, having a business interest in India, can open a non-interest bearing Special Non-Resident Rupee Account (SNRR account) with a bank for bona fide transactions in rupees.
 In a circular, the RBI said it has been decided to expand the scope of SNRR Account by permitting persons resident outside India to open such accounts for external commercial borrowings (ECBs), trade credits, and trade invoicing in Indian rupee.
 Further, restriction on the tenure of SNRR account, which is currently seven years, has also been removed.
 The Reserve Bank of India (RBI) said it has been taking steps for "popularising the cross-border transactions in Indian rupee".
 Meanwhile, the RBI has also modified norms regarding re-export of unsold rough diamonds from special notified zone of Customs without export declaration form (EDF) formality
 "For the lot/ lots cleared at the center/s...Bill of Entry shall be filed by the buyer," the circular said.
 Banks may permit such import payments after being satisfied with the bona-fides of the transaction, it added. NKD CS ABM
ABM

RBI expands scope of SNRR account to popularise rupee in cross-border transactions

New Delhi, Feb 17 () Tata Motors on Monday said it plans to raise Rs 500 crore through issue of securities for which a committee of its board will meet on February 24. Tata Motors' board in its meeting held on October 25, 2019 had approved and authorised raising of additional funds up to Rs 3,500 crore through external commercial borrowings, listed, unsecured, rated, non-convertible debentures or any other form of borrowing or in any combination. "We would like to inform you that the company is desirous of offering rated, listed, unsecured, redeemable, non-convertible debentures aggregating Rs 500 crore in two tranches...," Tata Motors said in a regulatory filing. The issuance is pursuant to the approval of the board of directors' resolution passed at its meeting held on October 25, 2019, it added. On the same date, the company's board had also approved raising of Rs 6,500 crore from Tata Sons through preferential issue. "In this regard is holding a meeting of its duly constituted committee of the board on February 24, 2020," the company said. The fund infusion by Tata Sons, the promoter of major operating companies of the Tata Group, into Tata Motors was aimed at helping the auto maker, whose domestic business was hit by slowdown that "significantly impacted sales volumes, profitability and cash flows and increased the net debt to unsustainable levels". RKL RVK

Tata Motors to raise Rs 500 cr through issue of non-convertible debentures

<ul><li>Public sector banks will be given ₹70,000 crore capital to boost credit growth in the country. </li><li>Government will start raising a part of its borrowings in external markets. </li><li>One-time six month partial guarantee will be given for loans to high-rated pooled assets of financially sound NBFCs amount to ₹1,00,000 crore. </li></ul>The Finance Minister today gave a shot in the arm for public sector banks. They will be given ₹70,000 crore capital to boost credit growth in the country, which has been slow for the last few years. Added to that, the government will take some of its own loans away from Indian banks. The country’s biggest borrower is the government and banks love to lend them because of security. Now, this will change as the government will raise money internationally. “India’s sovereign external debt to GDP is among the lowest globally at less than 5%. The Government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have a beneficial impact on demand situation for the government securities in the domestic market,” the Finance Minister Nirmala Sitharaman said in the Budget speech on Friday. Gains from ‘Cleaning’ The stress in the banking sector and overall liquidity has been eased by other measures as well. The Finance Minister also said that the banking system has gained from ‘cleaning’ of the system. "NPAs of commercial banks have reduced by over ₹1,00,000 crore over the last year, record recovery of over ₹4,00,000 crore due to Insolvency and Bankruptcy Code and other measures has been affected over the last four years,” said Sitharaman. Helping NBFCs She also directed banks to not turn unduly risk averse of lending to non-banking financial companies (NBFCs). Banks have steering clear of any lending to them after IL&amp;FS defaulted on payments to them, dragging down as many as eight banks with them. Ever since, the funding pipe for NBFCs has died up. “NBFCs are playing an extremely important role in sustaining consumption demand as well as capital formation in small and medium industrial segment,” she said. The government is also walking the talk. It will provide a one-time six month partial guarantee to public sector banks (PSBs) for the first loss of up to 10%, for high-rated pooled assets of financially sound NBFCs amount to ₹1,00,000 crore. “Since the liquidity crisis, the banks have become more conservative and were wary of lending to NBFCs or providing interest rate reductions. Enhancing credit guarantee for portfolio purchases will definitely improve the flow of funds to healthy NBFCs with a good quality asset pool,” said Hardika Shah, Founder of Kinara Capital. SEE ALSO <a href="https://www.businessinsider.in/ilfs-management-had-deviously-bulldozed-rating-agencies-leading-to-the-scam/articleshow/70066909.cms">IL&amp;FS management had 'deviously' bulldozed rating agencies leading to the scam</a> <h1 style="line-height:1.44;margin-top:0pt;margin-bottom:8pt;border-bottom:solid #eeeeee 0.75pt;background-color:#ffffff;padding:0pt 0pt 15pt 0pt;"> </h1>

You Searched For "external commercial borrowing" and got 13 results

India just made it easier for companies to borrow money from overseas

Dilsher Dhillon

India's external debt rose 8.2% in 2021-22 to $620 billion

IANS

Indian Industry Raised $3.49 Billion From Overseas Markets In November

BI India Bureau

RBI tries to boost forex reserves by easing NRI deposit norms

IANS

Indian cos' foreign borrowings down 45 pc to USD 2 bn in Dec'19

PTI

India Inc's overseas borrowing up 6.5% to USD 2.12 bn in Nov 2019

PTI

India's forex reserves at record high of USD 675 billion, external sector resilient: RBI Governor Shaktikanta Das

PTI

RBI's moves to boost forex inflows could have an impact on domestic borrowing rates

IANS

Jio’s fundraising spree and fall in imports help India clock the first current account surplus in 17 years

PTI

India's external debt of $620bn is sustainable: Finance Ministry report

IANS

RBI expands scope of SNRR account to popularise rupee in cross-border transactions

PTI

Tata Motors to raise Rs 500 cr through issue of non-convertible debentures

PTI

Indian banks will now have more cash to lend for more reasons than one

Katya Naidu

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