Can Indian banks refinance a ECB?

Yes. However, the new ECB lenders should also be foreign equity holders as defined in the ECB framework and subject to applicable refinancing guidelines.

What is refinancing by RBI?

It allows scheduled commercial banks (except Regional Rural Banks) to refinance up to 1% of Net Demand and Time Liabilities (NDTL) of each bank. Repo rate under LAF (Liquidity Adjustment Facility) is applicable for this facility.

What is ECB with respect to RBI?

Introduction: 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.

How do I apply for the ECB?

Applicants are required to submit an application in form ECB through designated AD bank to the Chief General Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Central Office , Central Office , External Commercial Borrowings Division, Mumbai – 400 001, along with necessary documents.

Can ECB be refinanced?

Is refinancing of ECBs raised from foreign equity holders and utilised for working capital/ general corporate purpose/ repayment of Rupee loans permitted? Yes. However, the new ECB lenders should also be foreign equity holders as defined in the ECB framework and subject to applicable refinancing guidelines.

What is FEMA ECB?

Background. ECBs are governed by RBI Master Direction- External Commercial Borrowings, Trade Credits and Structured Obligations, and Foreign Exchange Management Act, 1999 (FEMA). This article aims to help understand the ECB and its impact on the Indian Economy.

What refinance means?

Refinancing your mortgage basically means that you are trading in your old mortgage for a new one, and possibly a new balance [1]. When you refinance your mortgage, your bank or lender pays off your old mortgage with the new one; this is the reason for the term refinancing.

What is refinance institution?

Refinancing institutions are important institutions who give loans to other institutions who ultimately gives loans to the end customers. For example, the National Housing Bank is a refinancing institution in the field of housing finance in India.

Can ECB be refinanced by RTL?

Who is eligible for ECB?

Under the New ECB Framework, the list of Eligible Borrowers has been expanded to include all entities eligible to receive FDI. Thus, an Indian company, an Indian LLP operating in a sector where FDI under automatic route up to 100% is permitted and including start-up companies are eligible for ECB.

How can I get ECB in India?

The ECBs can be obtained through automatic route or approval route or by combination of both the routes. Monitored by RBI, ECB is a facility made available to Indian eligible entities to be able to seek huge investment from outside India and allow for foreign capital flow in India.

How many types of ECB are there?

Track III: Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years. The 7 forms of ECBs are buyer’s credit, supplier’s credit, financial lease, FCCBs, FCEBs, loans including bank loans, and securitized instruments.

Can Indian Banks participate in refinancing of existing ECB?

Indian banks are permitted to participate in refinancing of existing ECB, only for highly rated corporates (AAA) and for Maharatna/Navratna public sector undertakings. 7.4. Conversion of ECB into equity: Conversion of ECB, including those which are matured but unpaid, into equity is permitted subject to the following conditions: i.

What are the options for raising loans through ECB?

ECB Framework: The framework for raising loans through ECB (hereinafter referred to as the ECB Framework) comprises the following two options: Loans including bank loans; floating/ fixed rate notes/ bonds/ debentures (other than fully and compulsorily convertible instruments); Trade credits beyond 3 years; FCCBs; FCEBs and Financial Lease.

Can repayment of principal of ECB start before completion of 5 years?

In case of an ECB raised from foreign equity holder and utilized for general corporate purpose/working capital/repayment of Rupee loans, can repayment of principal of ECB start before the completion of 5 years? Yes, however, the ECB should have minimum average maturity period of 5 years.

How to apply for an approval route from RBI?

For approval route cases, the borrowers may approach the RBI with an application in prescribed format (Form ECB) for examination through their AD Category I bank. Such cases shall be considered keeping in view the overall guidelines, macroeconomic situation and merits of the specific proposals.