India's central bank has finalised rules on overseas borrowings in order to promote long-term foreign currency and rupee debt, especially for infrastructure development. The Reserve Bank of India's latest notice tightens proposals tabled in late September in what it described as a long overdue revision of the framework that dictates Indian companies' borrowing behaviour in the international markets. While the guidelines signal an attempt to broaden the universe of foreign investors and allow Indian borrowers easier access to international capital, they also impose tougher pricing limits on foreign-currency debt and come with a warning of further revisions next year. "The framework for ECB [external commercial borrowing], as a means to attract flow of funds from abroad, will continue to be a major tool to calibrate the policy towards capital account management in response to evolving macroeconomic situation," the RBI said in a statement. "These guidelines will be reviewed after one year, based on the experience and evolving macroeconomic situation."
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