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India's capital inflows were not a concern now as they were in line with the country's requirements, media reported quoting Reserve Bank of India (RBI) Governor D Subbarao Thursday in Kolkata.
He said the inflows were not as much as they were during 2006-2008. If there was excess of capital inflows, then the apex bank would respond to it, he added.
Market regulator SEBI has estimated the net foreign institutional investments at $24.5 billion in 2009.
On tightening of the external commercial borrowings or ECB guidelines, he said they were relaxed due to the global financial crisis and intense credit squeeze to help companies raise resources. Currently the market has excess liquidity and so the apex bank is going back to its earlier policy stance.
RBI Deputy Governor Shyamala Gopinath also said the new ECB norms were part of India's capital account management and they did not indicate capital control. The new ECB norms will come into effect from next month with companies maintaining all-in-cost within 300 basis points above Libor for overseas borrowing up to five years.
A section of bankers opined that this move may spur companies' demand for bank credit, which is growing at a slow 10.4% rate year-on-year.
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