ECB POLICY FOR EXPORTERS/FOREIGN EXCHANGE EARNERS

ECB POLICY FOR EXPORTERS/FOREIGN EXCHANGE EARNERS
Corporates who have foreign exchange earnings are permitted to raise ECB upto thrice the average amount of annual exports during the previous three years subject to a maximum of USD 200 million without end-use restrictions, i.e. for general corporate objectives excluding investments in stock markets or in real estate. The minimum average maturity will be three years upto USD 20 million equivalent and
five years for ECBs exceeding USD 20 million.

ECB - USD 5 MILLION SCHEME

ECB - USD 5 MILLION SCHEME

All Corporates and Institutions are permitted to raise ECB upto USD 5 million equivalent at a minimum simple maturity of 3 years. Borrowers may utilise the proceeds under this window for general corporate objectives without any end-use use restrictions excluding investments in stock markets or in real estate. The loan amount may be raised in one or more tranches subject to the caveat that the total outstanding loan under this scheme at any point of time should not exceed USD 5 million. Each tranche should have a minimum simple maturity of 3 years. (Government have delegated the sanctioning powers to Reserve Bank of India (RBI)).

ECB Policy

ECB Policy 

External Commercial Borrowings (ECBs) are defined to include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments such as Floating Rate Notes and Fixed Rate Bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window of Multilateral Financial Institutions such as International Finance Corporation (Washington), ADB, AFIC, CDC, etc.
ECBs are being permitted by the Government as a source of finance for Indian Corporates for expansion of existing capacity as well as for fresh investment.
The policy seeks to keep an annual cap or ceiling on access to ECB, consistent with prudent debt management.
The policy also seeks to give greater priority for projects in the infrastructure and core sectors such as Power, oil Exploration, Telecom, Railways, Roads & Bridges, Ports, Industrial Parks and Urban Infrastructure etc. and the export sector.
Applicants will be free to raise ECB from any internationally recognised source such as banks, export credit agencies, suppliers of equipment, foreign collaborators, foreign equity-holders, international capital markets etc. offers from unrecognised sources will not be entertained.


ECBs should have the following minimum average maturities:

1. Minimum average maturity of three years for external commercial borrowings equal to or less than USD 20 million equivalent in respect of all sectors except 100% EOUs

2. Minimum average maturity of five years for external commercial borrowings greater than USD 20 million equivalent in respect of all sectors except 100% EOUs

3. 100% Export oriented Units (EOUs) are permitted ECB at a minimum average maturity of three years for any amount.