Internationally, there is a big mature market for funding distressed assets. Many global banks with huge fund base have appetite for such opportunities. ECBs are cheap funds for bidders even when they have to hedge for foreign exchange risks.Banks within the country are barred from providing acquisition finance. Foreign branches and overseas subsidiaries of Indian banks are prohibited to extend ECB money for bidders for insolvency activity in India.
It’s a well-regulated process and only those companies that have been identified under the resolution process would be able to tap this route, he said.