The Reserve Bank of India (RBI) in its Monetary Policy Committee review today, announced that the unutilised external commercial borrowing (ECB) proceeds drawn down before March 1, 2020, can be parked in term deposits with banks in the country, up to March 1, 2022. The measure was announced to provide relief to borrowers who could not utilise the proceeds due to the impact of COVID-19. External commercial borrowings are simply commercial loans that are raised by eligible resident entities from recognised non-resident entities according to the Reserve Bank. (Also Read: RBI Monetary Policy Highlights: Repo Rate Steady, Growth Projection Retained At 10.5% )
The entities must conform to parameters such as permitted and non-permitted end-uses, minimum maturity, etc. RBI Governor Shaktikanta Das announced that under the extant ECB framework, the borrowers are allowed to place proceeds in term deposits with banks in India for a maximum period of 12 months. According to the one-time measure to provide relief, the unutilised ECB proceeds drawn down on or before March 1, 2020, can now be parked in term deposits with AD category-I banks up to next year – March 1, 2022.
Meanwhile, the central bank Governor also announced that the Financial Inclusion Index or FI Index will be published annually in July. The financial inclusion is mostly viewed as a key enabler for achieving sustainable and inclusive development across the world. It is a thrust area for the government, the Reserve Bank, and other regulators, said the RBI.