The Reserve Bank of India (RBI) on 23 January 2015 simplified procedure for External Commercial Borrowings (ECB) Policy.
The directions have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999. Changes are effected during the tenure of the ECB.
The directions are as follows
• Under the simplified procedure, the RBI has delegated powers to the banks to make changes/modifications in the draw-down and repayment schedules of the ECB raised both under the automatic and approval routes. FCCBs will, however, not be covered within these provisions.
• It has simplified the existing procedure for rescheduling/restructuring of external commercial borrowings (ECBs). It also delegated more powers to banks to deal with cases related to change in draw-down and repayment schedules.
• The above mentioned changes/modifications could either be associated with change/no change in the average maturity period and/or with changes (increase/decrease) in the all-in-cost.
• Banks can allow reduction in the amount of ECB (irrespective of the number of occasions) along with any changes in draw-down and repayment schedules, average maturity period and all-in-cost. They can also permit increase in all-in-cost of ECB, irrespective of the number of occasions.
• Banks can permit changes/ modifications in the draw-down and repayment schedules of the ECB provided the revised average maturity period and/or all-in-cost is/are in conformity with the applicable ceilings/guidelines.
• Banks may also allow the cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower’s level in the form of merger/demerger/amalgamation/acquisition after satisfying themselves that the company acquiring the ECB is an eligible borrower and ECB continues to be in compliance with applicable guidelines.
When: 23 January 2015