In terms of A.P. (DIR Series) Circular No. 113 dated April 24, 2012 issued by Reserve Bank of India ("RBI"), external commercial borrowings ("ECB") was allowed to be raised by airline companies for working capital as a permissible end-use, under the approval route, subject to the conditions stipulated therein. The scheme was extended initially till December 31, 2013 vide A.P. (DIR Series) Circular No.116 dated June 25, 2013 and thereafter till March 31, 2015 vide A.P. (DIR Series) Circular No. 113 dated March 26, 2014.
Now the said scheme of raising ECB for working capital for Civil Aviation Sector has been extended till March 31, 2016 with the same terms and conditions by RBI vide its Circular bearing no. RBI//2014-15/638 A.P. (DIR Series) Circular No.109 dated June 11, 2015.
The overall ECB ceiling for the entire civil aviation sector would continue to be USD 1 billion and the maximum permissible ECB that can be availed by an individual airline company will also continue to be USD (United States Dollar) 300 million. This limit can be utilized for working capital as well as refinancing of the outstanding working capital rupee loan(s) availed of from the domestic banking system.
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