RBI eases overseas borrowing norms for state-run oil companies

Reuters Delhi, India Oct 03, 2018, 07.45 PM(IST)

File Photo: Reserve Bank Of India. Photograph:( Zee News Network )

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The move comes in light of the rupee's drop to a record low on Wednesday. 

The Reserve Bank of India on Wednesday said it will relax external commercial borrowings (ECB) policy to allow state-run oil marketing companies to raise external debt for working capital purposes.

The RBI will permit oil marketing firms to raise overseas funds with minimum average maturity period of 3 or 5 years under the automatic route, it said in a statement. It lifted the individual borrowing limit set at $750 million under the ECB framework.

The move comes in light of the rupee's drop to a record low on Wednesday triggered by a sharp rise in global crude oil prices, prompting the central bank to quickly intervene to slow its fall.