RBI lets banks borrow abroad up to 100% of capital

In a bid to increase inflow of foreign capital, the Reserve Bank of India (RBI), on Tuesday said banks can borrow from overseas market up to 100% of their unimpaired Tier I capital as at the close of the previous quarter, with an upper limit of $10 million.

In a bid to increase inflow of foreign capital, the Reserve Bank of India (RBI), on Tuesday said banks can borrow from overseas market up to 100% of their unimpaired Tier I capital as at the close of the previous quarter, with an upper limit of $10 million.

The previous limit was 50%, excluding borrowings for financing of export credit in foreign currency and capital instruments.

Banks are given the option to swap such borrowing with RBI at a concessional rate of 1 percentage point below the swap rate prevailing in the market.