14.22        ndian    onom
         (v) ECBs for interest during construction           (iv) Introducing a new ECB scheme of
              (IDC) that accumulates on a loan during             US $10 billion for companies in the
              the project execution phase for companies           manufacturing and infrastructure sectors;
              in the infrastructure sector would be           (v) Permitting the Small Industries
              permitted. This would be subject to the             Development Bank (SIDBI) as an eligible
              condition that the IDC is capitalised and           borrower for accessing ECB for on-
              is part of the project cost.                        lending to the micro, small and medium
        (vi) Renminbi (RMB)—the Chinese currency                  enterprises (MSMEs); and
              —was approved as an acceptable                 (vi) Permitting the National Housing Bank
              currency for raising ECBs subject to/               (NHB)/Housing Finance Companies to
              limit of US $ 1 billion within the existing         avail themselves of ECBs for financing
              ECB ceiling (allowed only through the               prospective owners of low cost /affordable
              approval route).                                    housing units.
       (vii) The existing ECB limits under the              (vii) In December 2015, the RBI announced
              automatic route were enhanced from                  a new ECB framework which was more
              US $ 500 million to US$ 750 million                 attuned to the current economic and
              for eligible corporates. For borrowers              business environment—from regulatory
              in the services sector, the limit has been          perspective, now, the ECBs will have
              enhanced from US$ 100 million to US$                three main clear-cut categories—
              200 million and for NGOs engaged in                 (a) Medium-term foreign currency-
              micro-finance activities from the existing               denominated ECB;
              US$ 5 million to US$ 10 million.                    (b) Long-term        foreign      currency-
          Till February 2017, the norms for ECB                        denominated ECB (with minimum
     were further simplified and streamlined by the                    average maturity of 10 years); and
     government—major steps taken in this regard                  (c) Indian rupee-denominated ECB.
     were as given below:
                                                                  The new lenders comprise overseas
          (i) Enhancing the limit for refinancing rupee           regulated financial institutions, sovereign
              loans through ECB from 25 per cent to               wealth funds, pension funds, insurance
              40 per cent for Indian companies in the             companies, etc. and has an exhaustive
              power sector;                                       list of permissible end-users with only a
         (ii) Allowing ECB for capital expenditure on             small negative list for long-term foreign
              the maintenance and operation of toll               currency-denominated ECB and INR-
              systems for roads and highways so long              denominated ECB.
              as they are a part of the original project   (viii) In order to facilitate rupee-denominated
              subject to certain conditions, and also for         borrowing from overseas, the government
              low cost housing projects;                          decided (December 2015) to put in place
        (iii) Reducing the withholding tax from 20                a framework for issuance of rupee-
              per cent to 5 per cent for a period of three        denominated overseas bonds (such bonds
              years (July 2012–June 2015) on interest             have got a popular tag of the masala
              payments on ECBs;                                   bonds).