【Mumbai】The Reserve Bank of India on Tuesday disallowed overseas branches of domestic banks from extending external commercial borrowings (ECBs) to manufacturing and infrastructure companies for repaying rupee loans.
"If the ECB is availed from overseas branches or subsidiaries of Indian banks, the risk remains within the Indian banking system," the RBI said in a notification.
Further, the RBI said banks and their overseas units should not issue credit guarantees for overseas subsidiaries of Indian companies seeking to raise loans from other entities, expect for business needs.
○FIIs pull out $1.06 bn from bonds
【Mumbai】Foreign institutional investors (FIIs) seem to find Indian bonds less attractive these days having turned net sellers in the past couple of weeks, despite yields being near multi-month highs and the rupee remaining stable.
FIIs have pulled out $1.06 billion from the local debt market so far in April even as the 10-year bond yield hit a four-month high, crossing 9% on April 7. Some of the outflows were anticipated; of the $1.06 billion that moved out, $450 million was due to treasury bills maturing.
The Reserve Bank of India has disallowed FIIs from investing in short-term treasury bills from April onwards. FIIs had pumped in $6.1 billion during January-March, most of it into treasury bills. However, FIIs have also turned a tad cautious because forward premiums have risen and the poll results are around the corner.
○NRI deposits in India about $65 bn in last 6 months: Lord Paul
【New Delhi】Reminding the role played by non-resident Indians (NRIs) in the country's development, UK-based leading industrialist Lord Swraj Paul has said almost USD 65 billion have come into India in the last six months through NRI deposits.
Lord Paul, who is the Founder Chairman of UK-based Caparo Group, also said "India tends to forget" the contributions made by the NRI community.
○India, US to share offshore account details of citizens
【New Delhi】India and the US have agreed to share information on financial accounts held in each country by their citizens in a major step towards preventing unaccounted wealth being stashed abroad.
India will sign an agreement with the US that would enable New Delhi share information about accounts and investments held by US citizens in various Indian financial institutions. The idea is to help US crack down on its citizens using Indian banks and other entities for parking their funds away from the eyes of the US Internal Revenue Service (IRS).
【News source】
RBI stops banks from extending ECBs for repaying rupee loans
FIIs pull out $1.06 bn from bonds
NRI deposits in India about $65 bn in last 6 months: Lord Paul
India, US to share offshore account details of citizens
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