Friday, 12 June 2015

RBI allows airlines, affordable housing project developers to tap overseas funds till March next

The RBI has extended to March 2016 the facility of raising funds overseas by airline companies and affordable housing projects.

In April 2012, the central bank had allowed aviation firms and in June 2013 low-cost affordable housing projects to borrow funds under the external commercial borrowings (ECBs) route based on cash flow, FOREIGN EXCHANGE earnings and capability to service the debt.

“On a review, it has been decided that the scheme of raising ECB for working capital for civil aviation sector will continue till March 31, 2016, with the same terms and conditions,” the RBI said in a notification on Thursday.

In a similar notification, the central bank said, “…it has been decided that the scheme of raising ECBs for low-cost affordable housing projects will continue for the financial year 2015-16.” It allowed real estate developers and housing FINANCE companies to raise $1 billion through ECBs, which could be used either for developing low-cost housing projects or for providing loans up to ₹25 lakh to individuals for buying units with a price tag of ₹30 lakh or less.

The ECB ceiling for the entire civil aviation sector would be $1 billion and the maximum permissible ECB that can be utilized by an individual airline company will be $300 million. This can be raised with a minimum average maturity period of three years.

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