RBI draft ECB norms: Firms may get access to sovereign, pension funds

• The Reserve Bank of India (RBI) has proposed to allow domestic firms to borrow from foreign regulated financial entities, pension funds, insurance funds, sovereign wealth funds and other long-term investors as part of a major relaxation in fund raising via external commercial borrowing route. 
• The RBI has also proposed that Indian banks act as ECB lenders subject to norms. The draft ECB norms, however, proposed to lower the all-in cost borrowing by 0.50 per cent to ensure that the funds are borrowed from abroad at a reasonable interest rate. 
• According to the draft guidelines on ECBs released by the RBI, there will only be a small negative list which include stock market operations, real estate activity and purchase of land. They will not be allowed to raise funds via ECBs or rupee-denominated borrowing