Reserve Bank of India vide RBI/2012-13/367, A.P. (DIR Series) Circular No. 69 dated 7th January, 2013 enhanced the ECB limit for NBFC-IFCs under the automatic route from 50 % of their owned funds to 75 % of their owned funds, including the outstanding ECBs. The Circular further clarified that NBFC-IFCs desirous of availing ECBs beyond 75 % of their owned funds would require the approval of the Reserve Bank and will, therefore, be considered under the approval route. The hedging requirement for currency risk is also reduced from 100 per cent of their exposure to 75 per cent of their exposure.
Earlier NBFC-IFCS were permitted to avail of ECBs, including the outstanding ECBs, up to 50 per cent of their owned funds under the automatic route and ECBs by IFCs above 50 per cent of their owned funds were considered under the approval route. IFCs were also required to hedge their currency risk in full