The Reserve Bank of India, RBI, has decided that Indian companies will not be permitted to raise External Commercial Borrowings from overseas branches or subsidiaries of Indian banks for refinance or repayment of the Rupee loans raised from domestic banking system. In a notification, the RBI said that the restrictions are applicable in case of take-out financing, infrastructure financing and spectrum allocation and other repayments. The changes in the ECB policy come into force with immediate effect.External Commercial Borrowing loans are much cheaper than domestic loans and it is believed that some companies use the arbitrage available to their advantage.