External Commercial Borrowings (ECB) refer to commercial loans in the form of bank loans, buyers credit, suppliers credit etc. availed from non-resident lenders with a minimum average maturity of 3 years. ECB can be accessed under Automatic Route and Approval Route
The borrower has to comply with the existing ECB guidelines as to eligibility as to borrower, lender, amount, maturity, all-in-cost ceilings and end use. Borrowers will have to enter into loan agreement with lender for raising ECB. The borrower must obtain a Loan Registration Number (LRN) by submitting Form 83 to the designated AD bank.
Borrowers are required to submit ECB-2 Return certified by the designated AD bank on monthly basis so as to reach DSIM, Reserve Bank within seven working days from the close of month to which it relates.
Designated AD banks may approve changes / modifications in the drawdown / repayment schedule / drawdown schedule / amount of loan of the ECBs already availed, subject to certain conditions. Certain changes in the terms and conditions of the ECB after obtaining LRN from RBI require the prior approval of RBI.
RMC ensures in compliance with ECB guidelines, preparation of loan agreement, filing application in Form 83, getting relevant certifications for obtaining LRN for the ECB.
RMC also ensures in compliance with filing monthly ECB-2 returns with the RBI intimating the draw down, utilization, certification of the end use etc. and getting the approvals for any changes in terms of ECB.