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RBI External Commercial Borrowings Policy

RBI External Commercial Borrowings (ECB)

External Commercial Borrowings (ECB) refer to commercial loans [in the form of bank loans, buyers credit, suppliers credit, securitise instruments (e.g. floating rate notes and fixed rate bonds)] availed from non-resident lenders with minimum average maturity of 3 years.

Foreign Currency Convertible Bonds (FCCBs) mean a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which is payable in foreign currency. Further, the bonds are required to be issued in accordance with the scheme viz., "Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993, and subscribed by a non resident in foreign currency and convertible into ordinary shares of the issuing company in any manner, either in whole, or in part, on the basis of any equity related warrants attached to debt instruments. The policy for ECB is also applicable to FCCBs. The issues of FCCBs are also required to adhere to the provisions of Notification FEMA No. 120/RB-2004 dated July 7, 2004, as amended from time to time.

ECB can be accessed under two routes, viz.,
(i) Automatic Route outlined in paragraph I (A) and
(ii) Approval Route outlined in paragraph I (B).
ECB for investment in real sector -industrial sector, especially infrastructure sector-in India, are under Automatic Route, i.e. do not require RBI / Government approval. In case of doubt as regards eligibility to access Automatic Route, applicants may take recourse to the Approval Route.

Eligible Borrowers
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Tamil Nadu Industrial Guidance & Export Promotion Bureau
( Industries Department - Govt. of Tamil Nadu )
19-A, Rukmani Lakshmipathy Salai, Egmore, Chennai - 600 008. INDIA

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