External Commercial Borrowings (ECBs) are commercial loans raised by eligible resident entities from recognised non-resident entities and should conform to parameters, such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc. The parameters given above apply in totality and not on a stand-alone basis. ECBs can be issued in any freely convertible foreign currency.

Foreign currency loans given domestically by the banks out of the proceeds of Foreign Currency Non-Resident (Bank) [(FCNRB)] deposits – do not come under the ECB framework.

Eligible borrowers:

All entities eligible to receive FDI. Further, the following entities are also eligible to raise ECBs:

(i) Port Trusts;

(ii) Units in SEZ;

(iii) SIDBI; and

(iv) EXIM Bank of India.

The lender should be a resident of Financial Action Task Force (FATF) or the International Organization of Securities Commissions (IOSCO) compliant country, including on transfer of ECB. However,

(i) Multilateral and Regional Financial Institutions, where India is a member country, will also be considered as recognised lenders;

(ii) Individuals as lenders can only be permitted if they are foreign equity holders or for subscription to bonds/debentures listed abroad; and

(iii) Foreign branches / subsidiaries of the Indian banks are permitted as recognised lenders only for FCY (Foreign Currency) ECB (except Foreign currency convertible bonds – FCCBs and Foreign Currency Exchangeable Bonds – FCEBs). Foreign branches / subsidiaries of Indian banks, subject to applicable prudential norms, can participate as arrangers / underwriters / market-makers / traders for Rupee denominated bonds issued overseas. However, underwriting by foreign branches / subsidiaries of Indian banks for issuances by Indian banks will not be allowed.