The Hindu Business Line : Credit limit for overseas ventures hiked

BANKS can now extend credit and non-credit facilities to Indian joint ventures and wholly-owned subsidiaries abroad for up to 10 per cent of their (banks) unimpaired capital funds (Tier I and Tier II capital).

Earlier, banks were allowed to provide such facilities for only up to 5 per cent of their unimpaired Tier I capital, in a bid to provide banks additional avenues for deployment of funds held in FCNRB, EEFC, RFC, etc, accounts.

In a circular issued to bank chiefs, the Reserve Bank of India said the ceiling had been revised in view of the fact that authorised dealers were now free to undertake investments in overseas markets subject to limits approved by their respective boards.

The apex bank said the conditions stipulated earlier for such facilities would remain unchanged.

According to the RBI circular, grant of such loans should be based on proper appraisal and commercial viability of the projects and not merely on the reputation of the promoters backing the project. Non-fund-based facilities should be subjected to the same rigorous scrutiny as fund-based limits.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Re dips; gilts volatile

Syndicate Bank up on equity cut, dividend hike hopes

Sale of Coimbatore Pioneer Mills machinery — Sundaram Finance gets HC approval

Banks draw less refinancing from Nabard

Tata AIG office in Mangalore

New India, Bajaj Allianz top premium collections

Credit limit for overseas ventures hiked

ICICI Bank to use Pramati tool

Bank Muscat eyes retail portfolios

At this rate, one will lose interest in bank deposits

Credit risk better bet for banks than market risk

SBI launches Hyderabad card

Baits continue — this time for loans!