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External Commercial Borrowings (ECB) Policy – Revised framework
The circular contains the revised framework for External Commercial Borrowings. The framework will be reviewed after one year.
The revised ECB framework, which will apply in totality, comprises of the following three tracks:
Track I: Medium term foreign currency denominated ECB with Minimum Average Maturity (MAM) of 3 / 5 years.
Track II: Long term foreign currency denominated ECB with MAM of 10 years.
Track III: Indian Rupee denominated ECB with MAM of 3 / 5 years.
Involvement of Indian banks and their overseas branches / subsidiaries in relation to ECB to be raised by Indian entities is subject to prudential guidelines issued by RBI. Overseas branches / subsidiaries of Indian banks will not be permitted as lenders under Track II and III.
Entities raising ECB under the present framework can raise the said loans by March 31, 2016 provided the agreement in respect of the loan is already signed by the date the new framework comes into effect.
For raising of ECB under the following carve outs, the borrowers will, however, have time up to March 31, 2016 to sign the loan agreement and obtain the Loan Registration Number (LRN) from the Reserve Bank by this date: –
(i). ECB facility for working capital by airlines companies.
(ii). ECB facility for consistent foreign exchange earners under the USD 10 billion Scheme. (iii). ECB facility for low cost affordable housing projects (low cost affordable housing projects as defined in the extant Foreign Direct Investment policy). 55 The following 3 Forms for ECB have also be been revised and Annexed to this circular as under: –
Form 83 – Annex I
Form ECB – Annex II
Form ECB 2 – Annex III
