India Inc expects the government and the Reserve Bank of India (RBI) to take immediate steps to ensure companies can borrow from domestic banks to repay debt coming up for repayment in the next few months.
“We would need to borrow heavily from Indian banks to ensure that we meet our commitments to overseas debtors,” said the chief finance officer of a large export house.
Global credit markets have dried up following the financial crisis gripping the global economy. This means companies would be obliged to turn to Indian banks to meet their repayment commitments in the short-term. Indian banks would have to delve into the country’s forex reserves to lend money to companies.
However, many of the larger firms say they already have tie-ups with fund sources for debts that are due to mature by early next year.
Companies are taking comfort in the fact that India still has comfortable level of foreign exchange reserves, at $251 billion as on November 7.