RBI/2013-14/221
A.P. (DIR Series) Circular No.31
September 04, 2013
To
All Authorised Dealer Category-I Banks
Madam / Sir,
External Commercial Borrowings (ECB) from the foreign equity holder
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
the
A.P. (DIR Series) Circular No. 5 dated August 1, 2005, as amended from time
to time, relating to the External Commercial Borrowings (ECB).
- As per the extant ECB policy, borrowings in the form of ECB cannot be
utilized for general corporate purpose.
- On a review, 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 subject to the
following conditions:
- Minimum paid-up equity of 25 per cent 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); and
- Repayment of the principal shall commence only after completion of minimum
average maturity of 7 years. No prepayment will be allowed before maturity.
- The above modifications to the ECB guidelines will come into force with
immediate effect. All other aspects of extant ECB guidelines shall remain
unchanged.
- A.D. Category-I banks may bring the contents of this circular to the notice of
their constituents and customers.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager-in-Charge