Some key highlights of the New ECB framework released by RBI today
CA Rakesh Kumar
Chartered Accountant with expertise in Internal Audit, SOX audit, Internal financial Controls and Risk Management
Some key highlights of the New ECB framework released by RBI today:
1. Track 1 and Track 2 merged and to be called Foreign Currency Denominated ECB while Track 3 and RDBs framework will now be called Rupee Denominated ECB
2. Eligible borrowers to now be defined as all entities eligible to receive FDI plus some other categories like port trusts,units in SEZ etc to be eligible borrowers
3. Eligible lenders expanded :Lenders to be resident of FATF or IOSCO compliant country
Multilats, regional financial institutions,individuals and foreign branches/subsidiaries of Indian banks can also be lenders
4.minimum average maturity period(MAMP) of borrowings across categories to now be only 3 years (unless the borrowing is made from a foreign equity holder, where the MAMP will be 5 years)
exemption of ECBs upto $50 mln per financial year for manufacturing companies can have a MAMP of 1 year
5. ECBs upto $750mln which are in compliance with the parameters and other terms set out in the guideline will be permitted under automatic route not requiring prior approval from rbi