New Delhi: The Reserve Bank yesterday permitted startups to raise external commercial borrowings (ECBs) of up to USD 3 million in a financial year, a move aimed at boosting innovation and promoting job creation. The RBI said while issuing norms for ECB route for startups that the borrowing should be denominated in any freely convertible currency or in Indian Rupees (INR) or a combination thereof.
In case of borrowing in INR, the non-resident lender, should mobilise INR through swaps/outright sale undertaken through bank in India. AIR correspondent reports, the Reserve Bank of India (RBI) has detailed rules that would apply to startups looking to raise foreign borrowings, keeping restrictions on such funds to a minimum. Under this, Funds can be raised with a minimum maturity of 3 years. The regulator has not prescribed any cost-ceiling or restriction on the end use of the funds raised. Such conditions are applicable to borrowings by companies across most other sectors.