September 8, 2014
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1. External Commercial Borrowings (ECB) in Indian Rupees RBI has with a view to provide greater flexibility for structuring of ECB arrangements announced vide its circular RBI/2014-15/207 A.P. (DIR Series) Circular No.25 dated September 3, 2014, that recognised non-resident ECB lenders may extend loans in Indian Rupees subject to the following conditions:
- The lender should mobilise Indian Rupees through swaps undertaken with an Authorised Dealer Category-I bank in India.
- The ECB contract should comply with all other conditions applicable to the automatic and approval routes as the case may be.
- The all-in-cost of such ECBs should be commensurate with prevailing market conditions.
- Both the existing and fresh ECBs should be in compliance with the applicable guidelines;
- All-in-cost of fresh ECB should be less than that of the all-in-cost of existing ECB;
- Consent of the existing lender is available;
- Refinancing is to be undertaken before the maturity of the existing ECB;
- Borrower should not be in the default / Caution List of RBI and should not be under the investigation of the Directorate of Enforcement (DoE);
- Overseas branches / subsidiaries of Indian banks will not be permitted to extend ECB for refinancing an existing ECB; and
- All requirements in respect of reporting arrangements like filing of revised Form 83, etc. are followed.