The Reserve Bank of India (RBI) in its review of the Monetary Policy Committee today, announced that the proceeds of unused external commercial loans (ECBs) drawn before March 1, 2020, may be parked in deposits at term with banks nationwide, until March 1, 2022. The measure was announced to provide relief to borrowers who could not use the proceeds due to the impact of COVID-19. External commercial loans are simply commercial loans that are contracted by eligible resident entities from non-resident entities recognized by the Reserve Bank. (Read also: RBI Monetary Policy Highlights: Stable Repo Rate, Growth Projection Maintained at 10.5%)
Entities must comply with parameters such as authorized and unauthorized end uses, minimum deadline, etc. maximum duration of 12 months. According to the single relief measure, unused ECB proceeds drawn on or before March 1, 2020 can now be placed in term deposits with Category I AD banks until next year – March 1, 2022 .
Meanwhile, the governor of the central bank also announced that the Financial Inclusion Index or FI Index will be released every year in July. Financial inclusion is primarily seen as a key factor in achieving sustainable and inclusive development across the world. This is a priority area for the government, the Reserve Bank and other regulators, the RBI said.