ECB Documentation

External Commercial Borrowings are commercial loans widely used by eligible resident entities who raise ECBs from recognised non-resident/ Foreign entities.
ECB Documentation

How we Assist

  • Preparation of documents for fresh ECB applications
  • Guidance on regulations
  • CA/CS certification at competitive cost
  • Monthly ECB reporting
  • Discussion with AD bank

Monthly ECB Reporting: INR 2499 + Taxes*

Package of Fresh ECB Application and Monthly ECB Reporting:

INR 45000 + Taxes *
INR 22500+ Taxes
Limited Period Offer*

Inclusions

Consultation & Assistance on
1.  Entity Master Creation
2. Business User Creation
3. Document preparation as specified in 4. FIRMS portal and as required by AD Bank
5. Discussion with AD Bank for any
6. Clarification pertaining to FDI filing
7. Filing on FIRMS Portal for upto 2 times 8. For the same reporting. Filing beyond 2 Times at INR 2999.
9. Update on status of reporting
CA/CS certification at competitive cost
Email and Voice support

Note:
Visit to RBI or Bank (charges extra)

TERMS & CONDITIONS

1. Includes free consultation upto 5 hours per month.
2. Reporting for one entity for investment upto INR 8 cr .
3. For investment greater than INR 5 cr, charges to be discussed.
4. Reporting on FIRMS portal upto 2 times.
5. Support is provided for upto 2 months.
6. All actual expenses incurred to be reimbursed
7. All charges are excluding charges

Privacy policy

Data Collection: We collect personal information that you voluntarily provide to us when you register on the website, express interest in obtaining information about us or our products and services, participate in activities on the website, or otherwise contact us.

Use of Data: We use your information to provide, operate, and maintain our services, improve and personalize your experience on our website, communicate with you, and for security purposes to prevent fraud and abuse.

Data Sharing: We do not share your personal information with third parties except as necessary to provide you with our services, comply with the law, protect our rights, or with your consent.

Data Security: We implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk of processing your personal information and to protect it from unauthorized access, use, alteration, and disclosure.

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    Inclusions
    1. Prepare error free documentation for submission to AD Bank
    2. Assist with getting CA/CS certification
    3. Assistance with monthly reporting
    TERMS & CONDITIONS
    1. Includes free consultation upto 5 hours per month
    2. Reporting for one entity for ECB upto INR 8 cr . For investment greater than INR 8 cr, charges to be discussed.
    3. Support is provided for upto 2 months.
    4. All actual expenses incurred to be reimbursed
    5. All charges are excluding charges
    Privacy policy

    Data Collection: We collect personal information that you voluntarily provide to us when you register on the website, express interest in obtaining information about us or our products and services, participate in activities on the website, or otherwise contact us.

    Use of Data: We use your information to provide, operate, and maintain our services, improve and personalize your experience on our website, communicate with you, and for security purposes to prevent fraud and abuse.

    Data Sharing: We do not share your personal information with third parties except as necessary to provide you with our services, comply with the law, protect our rights, or with your consent.

    Data Security: We implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk of processing your personal information and to protect it from unauthorized access, use, alteration, and disclosure.

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    Frequently Asked Questions

    What is an External Commercial Borrowings (ECB) ?

    External Commercial Borrowings are commercial loans widely used by eligible resident entities who raise ECBs from recognized non-resident entities. ECBs should adhere to the criteria like minimum maturity period, maximum all-in-cost ceiling, permitted and non-permitted end-uses, etc. ECBs are governed by the Foreign Exchange Management Act (FEMA) Notification No. 3R & 8.

    How can a resident entity avail ECB in India?

    Draw-down with respect to an ECB is possible only after getting a Loan Registration Number (LRN) from the Reserve Bank. Changes in ECB specifications, in agreement with the ECB norms, should be reported to the RBI at the earliest by way of Revised Form ECB. In any case, the reporting should be made not later than 7 days from the changes effected. Also, the changes should be mentioned explicitly in the communication while submitting Revised Form ECB.

    You can raise ECB in INR or any freely convertible Foreign Currency. ECBs can be raised under the automatic route as well as the approval route, under the ECB framework.

    Under Automatic Route, the AD Category-I Bank examines the case and gives the approval. Entities wanting to raise ECB under the automatic route may approach an AD Category-I Bank with their proposal along with a duly filled Form ECB. Post approval by AD Category-I Bank, the application along with Form ECB is sent to RBI for issuance of LRN.
    Under Approval Route, prospective borrowers send in their requests to the RBI through their AD Category-I Banks for examination. Such cases are considered based on macroeconomic situation and merits of the specific proposals, keeping in view the overall guidelines.

    What are the various forms in which ECB’s can be availed?

    Different types of ECBs are as follows:

    • Loans including bank loans
    • Securitised instruments (such as floating rate notes, fixed-rate bonds, and non-convertible, partially convertible or optionally convertible preference shares/debentures)
    • Trade Credits beyond 3 years
    • Foreign Currency Convertible Bonds (FCCBs)
    • Financial Lease and
    • Foreign Currency Exchangeable Bonds (FCEB)

    Which entities are authorised to extend ECB/ are the recognised lenders?
    The lender should be resident of FATF or IOSCO compliant country, including on transfer of ECB. However,

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

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

    c) Foreign branches / subsidiaries of Indian banks are permitted as recognised lenders only for FCY ECB (except FCCBs and 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.

    What is the Minimum Average Maturity Period (MAMP)?
    MAMP for ECB will be 3 years. Call and put options, if any, shall not be exercisable prior to completion of minimum average maturity. However, for the specific categories mentioned below, the MAMP will be as prescribed therein:

    Sr.No.

    Category

    MAMP

    (a)

    ECB raised by manufacturing companies up to USD 50 million or its equivalent per financial year.

    1 year

    (b)

    ECB raised from foreign equity holder for working capital purposes, general corporate purposes or for repayment of Rupee loans

    5 years

    4(c)

    ECB raised for
    (i) working capital purposes or general corporate purposes
    (ii) on-lending by NBFCs for working capital purposes or general corporate purposes

    10 years

    (d)

    ECB raised for
    (i) repayment of Rupee loans availed domestically for capital expenditure
    (ii) on-lending by NBFCs for the same purpose

    7 years

    (e)

    ECB raised for
    (i) repayment of Rupee loans availed domestically for purposes other than capital expenditure
    (ii) on-lending by NBFCs for the same purpose

    10 years

    for the categories mentioned at (b) to (e) –
    (i) ECB cannot be raised from foreign branches / subsidiaries of Indian banks
    (ii) the prescribed MAMP will have to be strictly complied with under all circumstances.

    Can ECB be converted into Equity?

    Conversion of ECB, including those which are matured but unpaid, into equity is permitted subject to following conditions:
    1. The activity of the borrowing company is covered under the automatic route or required approval is obtained for FDI;
    2. Conversion not to breach applicable sectoral cap under FDI policy, and should be with lender’s consent;
    3. Compliance with pricing guidelines (FV on date of conversion)
    4. Consent of other lenders, if any;
    5. Conversion at exchange rate on date of agreement or any lesser rate with mutual consent;
    6. Compliance with filing requirements in Form FC-GPR and ECB 2 in case of partial conversion or conversion is phases. Again, such compliance of such conversion has to be done via the AD banker by making  detailed application and providing required documents to AD Banker.

    What Benchmark Rate can be used for pricing of FCY ECBs and TCs:

    On account of the discontinuance of LIBOR as a benchmark rate, benchmark rate in case of FCY ECB/TC shall refer to any widely accepted inter-bank rate or alternative reference rate (ARR) of 6-month tenor, applicable to the currency of borrowing.

    What is the All-in-cost ceiling for new ECBs/ TCs:

    The all-in-cost ceiling for new FCY ECBs and TCs has been increased by 50 bps to 500 bps and 300 bps, respectively, over the benchmark rates. To enable smooth transition of existing ECBs/ TCs linked to LIBOR whose benchmarks are changed to ARRs, the all-in cost ceiling for such ECBs/ TCs has been revised upwards by 100 basis points to 550 bps and 350 bps, respectively, over the ARR.

    What is the maximum permissible limit of ECB under Automatic route?

    USD 1.5 bn or equivalent in other currency. For Startups the amount would be limited to USD 3 million or equivalent per financial year. 

    Can the ECB loan amount be Parked abroad

    The proceeds of borrowings may, pending utilization for permissible end-uses, be parked abroad or in India as per the directions issued by the Reserve Bank from time to time.

    When is the borrower permitted to Draw down the ECB

    Draw-downs of borrowing shall be made only after obtaining the loan registration number from the Reserve Bank or from the ADs, as per the system put in place by the Reserve Bank. For non-adherence, the borrower may be required to pay penalty as specified by the Reserve Bank from time to time.

    Provided that non-payment of penalty as above shall be treated as a contravention and shall be subject to compounding or adjudication as provided in the Act or Rules framed thereunder.

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