However, banks cannot opt for such borrowings for capital augmentation, RBI said in a notification. Photo: Pradeep Gaur/Mint
Live Mint :Dinesh Unnikrishnan : Thu, Oct 10 2013. 08 39 PM IST
The move will enable banks to mobilise more funds from abroad
Mumbai: The Reserve Bank of India (RBI) on Thursday said banks can borrow from international and multilateral institutions up to 100% of their equity capital or $10 million, whichever is higher, till 30 November to fund their business needs.
However, banks cannot opt for such borrowings for capital augmentation, RBI said in a notification.
Such borrowings shall be eligible for the concessional swap facility offered by the Reserve Bank, the apex bank said. The RBI opened the swap facility for foreign currency deposits to encourage dollar inflow into the country.
The central bank’s move will enable banks to mobilise more funds from abroad at a time liquidity in the domestic banking system remains tight.
Currently, banks are allowed to borrow from their head office or overseas branches
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