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Relief for pandemic-hit external commercial borrowers who failed to utilise proceeds

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Reserve Bank on Wednesday said unutilised External Commercial Borrowing (ECB) proceeds drawn down before March 1, 2020, can be parked in term deposits with banks in India prospectively up to March 1, 2022, in a relief to borrowers who could not utilise the proceeds due to lockdown.

Under the extant ECB framework, borrowers are allowed to place ECB proceeds in term deposits with banks in India for a maximum period of 12 months.

“In view of the difficulty faced by borrowers in utilising already drawn down ECBs due to COVID-19 pandemic induced lockdown and restrictions, it has been decided to relax the above stipulation as a one-time measure, with a view to provide relief,” the RBI said in its statement on developmental and regulatory policies.

Accordingly, unutilised ECB proceeds drawn down on or before March 1, 2020, can be parked in term deposits with AD category-I banks in India prospectively up to March 1, 2022, it said.

The central bank will be issuing guidelines in this regard separately.

Meanwhile, the RBI said the Financial Inclusion Index (FI Index) will be published annually in July for the financial year ending previous March.

Financial inclusion has been viewed as a key enabler for achieving inclusive and sustainable development worldwide. This has been a thrust area for government, Reserve Bank and other regulators, with a number of steps having been taken and significant progress made over the years, the RBI said.

The Reserve Bank will construct and periodically publish the FI Index to measure the extent of financial inclusion in the country. The FI Index would be based on multiple parameters and shall reflect the broadening and deepening of financial inclusion in the country.

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