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RBI asks corporates to park ECB funds in India amidst rupee blues
- Amid falling value of the rupee, the Reserve Bank of India on Wednesday asked corporates to park funds raised through external commercial borrowings (ECBs) for domestic expenditure with local banks, a move that will increase the inflow of foreign currency.
- Such funds could be used for local sourcing of capital goods, on-lending to self-help groups or for micro credit and payment for spectrum allocation, among other purposes.
- It, however, said that ECBs meant for foreign currency expenditure can be retained abroad pending utilisation.
- As the cost of credit is significantly less in overseas markets, Indian companies have borrowed close to $29 billion in foreign currencies, through ECBs and FCCBs, so far in 2011, as against $18 billion in 2010.
Cabinet to consider 51 % FDI in multi-brand retail today
- Seeking to push through the reforms agenda and give a fillip to foreign direct investment (FDI), the Union Cabinet will on Thursday consider the ‘politically sensitive' proposal for 51 per cent FDI in multi-brand retail.
- It will also consider increasing the ceiling for FDI in single brand retail from 51 per cent to 100 per cent. If approved, the 51 per cent nod for FDI in multi-brand retail would give the much awaited green signal to global retail chains such as Walmart, Tesco and Carrefour to open shop in India.
- The decision on the issue is pending for over two-years as Opposition parties are against foreign investment in this sector.
- The $600 billion segment is dominated by small kirana traders.
