RBI allows take-out financing via ECB for infra, under the approval route

As per the existing norms, refinancing of domestic Rupee loans with ECB is not permitted. However, keeping in view the special funding needs of the infrastructure sector, RBI vide its Circular No. RBI/2010-11/124 dated July 22, 2010 has decided to review the ECB policy and put in place a scheme of take-out finance under the approval route. The relaxation comes in the wake of banks complaining that they were facing mismatch in asset-liability management in extending loans to the core sector.