RBI eases guidelines for External Commercial borrowings to resolve Asset liability mismatch of banks

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RBI eases guidelines for External Commercial borrowings
The apex bank of India, Reserve Bank of India (RBI), has decided to ease the External Commercial borrowings. According to the statement from RBI, the External Commercial borrowings (ECBs) of up to $20 million in a financial year should have a minimum average maturity of three years.

Further the ECBs of more than $20 million and up to $750 million or equivalent should have a minimum average maturity of five years.

The latest decision of RBI will give room to banks to manage their Assets and liability. In present time the Indian banks are struggling due to their asset liability mismatch.

The decline in loans and advances on assets side of balance sheet has also put the pressure to maintain the same maturity basket for the deposits. The higher interest rate scenario has led to slight slump in demand of loans and advances.

Dion Global Solutions Ltd

Read more about: rbi, assets, loans, interest rates
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