The Reserve Bank of India (RBI) on June 09, 2022 has re-issued Master Direction - External Commercial Borrowings, Trade Credits and Structured Obligations.
The following has been stated namely: -
• Transactions on account of External Commercial Borrowings (ECB) and Trade Credit (TC) are governed by sub-section 2 of section 6 of the Foreign Exchange Management Act, 1999 (FEMA).
• External Commercial Borrowings are commercial loans raised by eligible resident entities from recognised non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
• Parking of ECB proceeds: ECB proceeds are permitted to be parked abroad as well as domestically.
• Powers delegated to AD Category I banks to deal with ECB cases: The designated AD Category I banks can approve any requests from the borrowers for changes in respect of ECB, except for FCCBs/FCEBs, duly ensuring that the changed conditions, including change in name of borrower/lender, transfer of ECB and any other parameters, comply with extant ECB norms and are with the consent of lender(s).
[Notifications No. 5/2018-19]
