On Lending by DFls and Other Financial Intermediaries
While Dfls are required to adhere to the prescribed average maturity criteria, namely, a minimum of five years for loans more than USD 20 million equivalent and minimum three years for loans less than or equal to USD 20 million equivalent, for their borrowing; they are permitted to on-lend at different maturities. They’ may also on-lend for project related rupee expenditure.’ However, other financial intermediaries are required to adhere to the general ECB guidelines on maturity as well as end use in their on lending programmes. 1i Financial intermediaries, including DFIs, are required to on lend their ECBs within 12 months of drawdown. To enable better utilisation f ECBs of DFIs, they are permitted to on lend such recycled funds (available with them on account of time mismatch between.
repayment obligations of their sub borrowers tns-a-ois those of the DFls to offshore lenders) out of original ECDs only for import of capital goods and roiet-related rupee expenditure. Such recycled funds may not be on-lent for the following’ purposes: (i) Investment in real estate; (investment in stock markets, including secondary market trading; (iii) Working capital purposes and (iv) General corporate purposes.