RBI/2011 -12/169
A. P. (DIR Series) Circular No. 11
September 07, 2011
To
All Category - I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings – Simplification
of Procedure
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to
the Foreign Exchange Management (Borrowing or lending in foreign exchange)
Regulations, 2000, notified vide
Notification No. FEMA 3/2000-RB dated May 3,
2000, amended from time to time and the
A.P. (DIR Series) Circular No. 5 dated
August 1, 2005, amended from time to time relating to the External Commercial
Borrowings (ECB).
- As per the extant ECB procedures, any request for change of the
lender for an existing ECB is required to be referred by the Authorised
Dealer Bank to the Reserve Bank for necessary approval.
- As a measure of simplification of the existing procedures, it has been
decided to delegate powers to the designated AD Category-I banks to approve
the request from the ECB borrowers with respect to change in the recognized
lender when the original lender is an international bank or a multilateral
financial institution (such as IFC, ADB, CDC, etc.) or a regional financial
institution or a Government owned development financial institution or an
export credit agency or supplier of equipment and the new lender also
belongs to any one of the above mentioned categories, subject to the Authorised Dealer ensuring the following conditions:-
- the new lender is a recognized lender as per the extant ECB norms;
- there is no change in the other terms and conditions of the ECB; and
- the ECB is in compliance with the extant guidelines.
- However, changes in the recognized lender in case of foreign equity holder
and foreign collaborator will continue to be examined by the Reserve Bank.
- The changes in the recognized lender should be promptly reported to the
Department of Statistics and Information Management, Reserve Bank of India in
Form 83.
- The above modifications to the ECB guidelines will come into force with
immediate effect. All other aspects of the ECB policy, such as, USD 500 million
limit per company per financial year under the automatic route, eligible
borrower, end-use, all-in-cost ceiling, average maturity period, prepayment,
refinancing of existing ECB and reporting arrangements shall remain unchanged.
- AD Category –I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
- 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,
(Rashmi Fauzdar)
Chief General Manager