MUMBAI, June 24 (Reuters) - India’s central bank has made it easier for property developers to access foreign money in an effort to spur low-cost housing projects, such as slum rehabilitation.
The Reserve Bank of India (RBI) has extended the limit of $1 billion that can be borrowed through the external commercial borrowing (ECB) scheme to the 2014-2015 financial year from this year.
It will also allow companies to hedge the entire borrowing, protect them from any sharp depreciation of the rupee against the dollar.
“The ECB availed of by developers and builders shall be swapped into rupees for the entire maturity on a fully hedged basis,” the RBI said in a notification on Monday.
The central bank also reduced the minimum experience companies have to have to undertake these projects to 3 years from 5 years.
The Reserve Bank also scrapped the minimum paid-up capital of 500 million rupees ($8.38 million) for property developers.
The Indian rupee slumped to an all-time low of 59.9850 to the dollar last week and foreign investors have been selling Indian debt, with many of them incurring losses due to their unhedged currency exposure.
$1=59.7 rupees Reporting by Neha Dasgupta; Editing by Louise Heavens