Ease companies’ borrowing abroad, says govt panel

NEW DELHI: There should be no restrictions or ceilings on companies’ overseas borrowings through the external commercial borrowing (ECB) route, a government-appointed panel headed by finance expert MS Sahoo has recommended.

ECB refers to commercial loans taken by companies in foreign currencies. This essentially helps firs access low-cost funds from abroad.

The flow of funds through the ECB window annually is around $30 billion (about `180,000 crore).

“The restrictions on borrowers, lenders, end-uses, amount, maturity, all-in-cost ceiling, etc. have outlived their utility.”

The 10-member panel also recommended that every borrower should hedge a part of their borrowing.

Currently, the limit for each Indian company to raise funds through ECB in a financial year is $750 million (`4,500 crore), barring those belonging to segments such as hotel, hospital and software. (With agency inputs)