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ECB Application

ECB or External Commercial Borrowings are the types of borrowing taken by the entity registered in India from a foreign entity for commercial purposes. It is a prevalent and prominent method to bring investment or loans under the provisions and norms established by the Reserve Bank of India.

ECBs are governed and regulated by the RBI, Trade Credits and Structured Obligations and under the provisions of the Foreign Exchange Management Act, (FEMA).

External Commercial Borrowings are the type of loans raised by the entities registered in India from the non-residential Indian entities or from the companies that are registered abroad. ECBs should follow certain parameters based on Minimum Average Maturity Period, permitted and non-permitted end dues and maximum all-in-cost ceiling etc.

The Procedure of Raising and Registering ECBs applications

External Commercial Borrowings Application or ECB Application can be registered online. All ECBs can be raised through automatic mode if they confirm the following criteria mentioned below:

  • The borrowers are required to approach RBI for the ECBs applications in the prescribed format i.e in ECB Form. The applications will only be accepted if they confer with the RBI guidelines and norms.
  • ECBs applications and proposals should be within a certain threshold limit as prescribed under the RBI.
  • Applications exceeding the threshold limit shall be monitored by the empowered committee set up by the RBI.
  • The final decision for approval of ECB applications lies entirely with the RBI.

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