The Reserve Bank of India (RBI) has proposed a revamp of its External Commercial Borrowing (ECB) framework to rationalise regulations, as per a statement on Friday.

Under the proposed framework, borrowing limits would be linked to a company’s financial strength, while ECBs would be raised at market-determined interest rates. The RBI has also suggested simplifying end-use restrictions and minimum average maturity requirements to provide borrowers with more flexibility.

Another key change, as proposed by the framework, is the expansion of both the borrower and lender base eligible for ECB transactions, a move that is aimed at enhancing the flow of overseas credit to Indian entities. In addition, reporting requirements are proposed to be streamlined to reduce compliance burdens.

The bank has also opened the doors towards acquisition financing for domestic banks lending to Indian corporates. The move was preluded by a bevy of bankers seeking a free hand.