RBI allows bidders for stressed assets to borrow overseas

The Reserve Bank of India (RBI) has allowed bidders of insolvent companies to raise external commercial borrowings (ECBs) and use the proceeds to repay the rupee loans of the insolvent companies they are keen on acquiring. To access the funds, bidders must obtain prior approval from RBI, which will issue guidelines in this regard by the end of February 2019. RBI decided to ease the existing limitation on end use of ECB proceeds after realising that bidders may find it cheaper to borrow abroad to acquire distressed assets.