Govt allows $1 bn overseas borrowing for airline industry | Latest News India - Hindustan Times
close_game
close_game

Govt allows $1 bn overseas borrowing for airline industry

Hindustan Times | By, New Delhi
Apr 19, 2012 11:33 PM IST

India’s debt-laden airlines would be allowed to borrow up to $1 billion from overseas to meet their working capital requirements, the finance ministry said on Thursday. HT reports.

India’s debt-laden airlines would be allowed to borrow up to $1 billion from overseas to meet their working capital requirements, the finance ministry said on Thursday.

HT Image
HT Image


The move will enable Indian carriers, which are likely to post a record loss of $2.5 billion in 2011-12, to get cheaper loans and provide an additional source of low-cost capital to the airline industry to help it tide over their current financial crunch.

Hindustan Times - your fastest source for breaking news! Read now.
Finance minister Pranab Mukherjee had proposed the move to permit external commercial borrowing (ECB) in his budget speech.

“In order to increase access to ECBs, the Reserve Bank of India would consider relaxation in the average maturity period for ECBs above $20 million from five to three years,” the finance ministry said.

“The ECBs made under this provision would have a maximum ceiling of $1 billion for the entire civil aviation sector. The limit for individual airline companies would be $300 million. This limit can be availed either in a lump sum or in tranches depending upon the utilisation of the limit during the one year when the facility is available,” the ministry said.

It said that proposal of individual companies would be considered by the RBI under the approval route based on parametres such as cash flows and the capacity of individual companies to repay these loans from their foreign exchange earnings. The RBI is expected to issue relevant notification giving effect to the aforesaid budget announcement within seven days.

Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Arvind Kejriwal News Live, Bihar Board 10th Result 2024 Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On