Reserve Bank’s efforts to contain the Rupee volatility in turn resulted in large Rupee liquidity which had to be sterilised at considerable fiscal cost lest inflationary pressures became unmanageable. In the circumstances, the regulatory framework discouraged borrowing by Indian companies. I don’t need to amplify that this measure was in the greater interest of the economy including that of the companies.
It would have been the  2  BIS central bankers’ speeches  end of a nice story if the companies had moderated their foreign currency borrowings in response to these regulations. 8. But how did the companies respond? Let me elaborate three different ways in which they tried to circumnavigate the regulation with the caveat that there may be others. a.