fiogf49gjkf0d
External Commercial Borrowings (ECB) Policy – Simplification of Procedure
This circular has made the following changes in ECB procedures both under Automatic Route as well as Approval Route with immediate effect: –
1. Banks can now allow: –
a. Changes / modifications (irrespective of the number of occasions) in the draw-down and repayment schedules of the ECB whether associated with change in the average maturity period or not and / or with changes (increase / decrease) in the all-in-cost.
b. Reduction in the amount of ECB (irrespective of the number of occasions) along with any changes in draw-down and repayment schedules, average maturity period and all-in-cost.
c. Increase in all-in-cost of ECB, irrespective of the number of occasions.
However, banks have to ensure that: –
a. The revised average maturity period and / or allin- cost is / are in conformity with the applicable ceilings / guidelines.
b. The changes are effected during the tenure of the ECB.
c. If the lender is an overseas branch / subsidiary of an Indian bank, the changes will be subject to the applicable prudential norms.
2. Banks can also permit : –
a. Changes in the name of the lender of ECB after satisfying themselves with the bonafides of the transactions and ensuring that the ECB continues to be in compliance with applicable guidelines.
b. Cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower’s level in the form of merger/ demerger/amalgamation/acquisition duly as per the applicable laws/rules after satisfying themselves that the company acquiring the ECB is an eligible borrower and ECB continues to be in compliance with applicable guidelines.
These changes have to reported to RBI within 7 days of the change taking place in Form 83 and also highlighted in the covering letter. Also, these changes have to be reflected in the ECB 2 returns.
