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S&P: India's relaxed foreign borrowing rules are credit positive

S&P Global Ratings said the Indian central bank's decision to ease foreign-currency borrowing rules is credit positive for local companies, including nonbanking financial institutions, as it opens an alternate long-term funding channel amid tight domestic bank financing conditions.

The Reserve Bank of India eased restrictions on the end-use of external commercial borrowings for working capital requirements, repayment of rupee loans and others. The rule change will provide greater funding flexibility across all corporate sectors, S&P said.

The rating agency said it believes that companies with strong credit profiles or affiliation with the sovereign are more likely to benefit from the relaxed rules due to restrictions on cost and tenor.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.