Refinancing Existing Foreign Currency loan
Refinancing of outstanding amounts under existing loans by raising fresh loans at. lower costs is permitted on a case-to-case basis. subject o the condition that the outstanding maturity of the original loan is maintained. Rolling over of the ECB is not permitted. Similarly, a corporate borrowing overseas for financing its rippee related expenditure and swapping its ECHs with another corporate that requires foreign currency funds is not permitted.
Corporates can undertake liability management for hedging the interest and or exchange rate risk their underlying foreign currency exposure. Prior approval of the DEA or the RBI has been pensed with for concluding or winding up of the following transactions: (j) Interest ate swaps, Currency swaps, (iii) Coupon swaps, (iv) Purchase of interest rate caps/Collars and (v) Forward agreements