Cos facing probe allowed to tap ECBs via automatic route

The Reserve Bank has allowed corporates facing investigation from any law enforcement agency to raise funds through external commercial borrowings (ECBs) under the automatic route.

"It has been decided to permit all entities to avail ECBs under the automatic route as per the current norms, notwithstanding the pending investigations/adjudications/ appeals by the law enforcing agencies, without prejudice to the outcome of such investigations/adjudications/appeals," RBI said in a notification.

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It further said that banks while approving proposal of an applicant, who has indicated about the pending investigation, should intimate the concerned investigating agency by endorsing copy of the approval letter.

"The same procedure will be followed by the Reserve Bank of India also while approving such proposals," it said.

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As per earlier guidelines, corporates under investigation by any law enforcing agencies like Directorate of Enforcement (DoE) etc were not allowed to access ECB under the Automatic route.

"All other aspects of the ECB policy, under the Automatic route such as amount of ECB, eligible borrower, recognised lender, end-use, all-in-cost ceiling, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged," RBI said.

PTI