EXTERNAL COMMERCIAL BORROWING (ECB) FROM THE FOREIGN EQUITY HOLDER

ISSUING AUTHORITY : RESERVE BANK OF INDIA

DATE OF ISSUE : 04/09/2013

EFFECTIVE DATE : IMMEDIATE EFFECT

CIRCULAR NO. 31

It has been decided to permit eligible borrowers to avail of ECB under the approval route from their foreign equity holder company with minimum average maturity of 7 years for general corporate purposes.

Till now borrowings in the form of ECB were not permitted to be utilized for general corporate purpose.

However, it includes certain conditions:

• Minimum paid up equity of 25% should be held directly by the Lender.

• Such ECBs would not be used for any purpose not permitted under extant the ECB Guidelines (including on-lending to their group companies/step down subsidiaries in India).

• Repayment of the Principal shall commence only after completion of minimum average maturity of 7 years. No prepayment will be allowed before maturity.

All other aspects of extant ECB guidelines shall remain unchanged.

For detailed circular, please follow the Link below:
A.P. (DIR Series) Circular No.31