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This Circular rationalises and liberalises ECB guidelines as follows:
(i) Enhancement of ECB limit under the automatic route
(a) Eligible borrowers in real sector, industrial sector, infrastructure sector can now avail of ECB up to US $ 750 million or equivalent per financial year under the automatic route as against the present limit of US $ 500 million or equivalent per financial year.
(b) Corporates in specified service sectors viz. hotel, hospital and software, can avail of ECB up to US $ 200 million or equivalent during a financial year as against the present limit of US $ 100 million or equivalent per financial year, subject to the condition that the proceeds of the ECBs should not be used for acquisition of land.
(ii) ECBs designated in INR
(a) ‘All eligible borrowers’ can now avail of ECB designated in INR from foreign equity holders under the automatic/approval route, as the case may be, as per existing ECB guidelines.
(b) NGO engaged in micro-finance activities can continue to avail of ECB designated in INR, as hitherto, under the automatic route from overseas organisations and individuals as per existing guidelines.
(iii) ECB for Interest During Construction (IDC)
Interest During Construction (IDC) will be considered as a permissible end-use for Indian companies which are in the infrastructure sector, under the automatic/approval route, as the case may be, subject to the following conditions: (a) That the IDC is capitalised; and (b) Is part of the project cost.
