Easing foreign exchange borrowings and lendings

In a move to liberalize foreign currency borrowing by Indian corporates, in June the Reserve Bank of India (RBI) introduced significant amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000.

The amendments facilitate foreign currency borrowing or lending by Indian entities under both the automatic route and the approval route.

Regulation aims

The regulations set out the rules for foreign currency loans under the Indian foreign exchange regime. They aim to provide flexibility in borrowing by Indian entities, while retaining prudent limits on foreign currency borrowing.

Shardul Thacker is a partner with Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.