The RBI has allowed aviation companies to resort to
External Commercial Borrowing (ECB) for working capital purposes. The ECB will
be allowed to the airline companies based on the cash flow, foreign exchange
earnings and their capabilities to service the debt, according to the RBI
notification. The RBI has given aviation companies time up to May 2014 to raise
fund through the ECB route. The overall ECB ceiling for the entire civil
aviation sector would be $1 billion and the maximum permissible ECB that can be
utilized by an individual airline company will be $300 million.
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