The Reserve Bank of India will not permit repayment of domestic rupee loans availed in the country through external commercial borrowings from Indian banks' branches or subsidiaries abroad as the risk remains within the Indian banking system, it said in a statement on Tuesday.
The central bank also warned exporters against using bank guarantees, intended to facilitate execution of export contracts, for availing advances to repay their loans from Indian banks, which it said is a clear violation of its instructions.
Copyright: Thomson Reuters 2014
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