RBI eases foreign borrowing limit for infrastructure companies

MUMBAI Mon Jan 7, 2013 8:18pm IST

A worker sitting inside a crane is silhouetted against the setting sun at the construction site of a commercial complex in Noida, in Uttar Pradesh September 21, 2011. REUTERS/Parivartan Sharma/Files

A worker sitting inside a crane is silhouetted against the setting sun at the construction site of a commercial complex in Noida, in Uttar Pradesh September 21, 2011.

Credit: Reuters/Parivartan Sharma/Files

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MUMBAI (Reuters) - The Reserve Bank of India (RBI) said on Monday it has relaxed overseas borrowing limits for infrastructure finance companies, a move that will enable companies in the investment-hungry sector to raise funds more easily.

The RBI said infrastructure finance companies will no longer need to seek approval for raising funds overseas equivalent to up to 75 percent of their owned funds. The limit had been 50 percent.

India's infrastructure companies raise a large chunk of their borrowings from overseas because of attractive rates.

The RBI also relaxed the hedging requirement for currency risk for these companies to 75 percent of the exposure, from an earlier limit of 100 percent.

(Reporting by Neha Dasgupta; Editing by Catherine Evans)

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