What changed
The scheme permitting ECB for working capital in the civil aviation sector, previously valid until December 31, 2013, has been extended to March 31, 2015. No other conditions have been modified.
What it means for you
Airlines can continue to access foreign currency loans for working capital needs, easing liquidity pressures. Banks must process such ECB applications under the approval route, ensuring compliance with the original 2012 conditions.
What you must do
- Update internal guidelines to reflect the extended validity of ECB for civil aviation working capital till March 31, 2015.
- Advise airline clients that ECB applications for working capital will be processed under the approval route with unchanged conditions.
- Monitor compliance with all conditions from the April 24, 2012 circular when handling such ECB proposals.
Who it affects
Category-I Authorised Dealer Banks, Airlines and civil aviation companies, Corporate borrowers in the aviation sector
What is the key change in this circular?
The circular extends the timeline for raising ECB for working capital in the civil aviation sector from December 31, 2013 to March 31, 2015, under the approval route.
Are there any new conditions for ECB under this extension?
No, all conditions from the earlier circular dated April 24, 2012 remain unchanged.
Which banks are primarily responsible for implementing this circular?
All Category-I Authorised Dealer banks must bring the contents to their constituents and customers.