The Indian central bank allowed the overseas branches and subsidiaries of Indian banks to refinance the external commercial borrowings of corporates as a way to lower borrowing costs.
The Reserve Bank of India said Dec. 6 that ECB refinancing will be permitted for Indian banks' overseas branches and subsidiaries in order to level the playing field. Previously, Indian banks' overseas branches and subsidiaries were not allowed to offer such refinancing.
The detailed guidelines on the matter will be issued within a week, the central bank said.
Meanwhile, the central bank decided to rationalize the framework for the merchant discount rate that is applicable on debit card transactions. The move will support the acceptance of debit card payments for consumer purchases. The central bank said a differentiated merchant discount rate for asset-light infrastructure and a cap on the absolute amount of merchant discount rate will also be prescribed.