EXTERNAL COMMERCIALEXTERNAL COMMERCIAL

BORROWINGSBORROWINGS

The minimum average maturity period(MAMP) has been kept at 3 years for allECBs, except the borrowers specificallypermitted to borrow for a shorter period.

WHAT ARE EXTERNAL

COMMERCIAL BORROWINGS?

As per the latest ECB framework, alleligible borrowers can raise ECBs up toUSD 750 million or equivalent perfinancial year under the automatic route.

ECBs are commercial loans raisedby eligible resident entities fromrecognised non-resident entities.

Most of these loans are provided byforeign commercial banks and otherinstitutions.

Additionally, Port Trusts, Units in SEZ,SIDBI, EXIM Bank, registered entitiesengaged in micro-finance activities, viz.,registered not for profit companies,registered societies/trusts/cooperativesand non-government organisations canalso borrow under this framework.

All entities eligible to receiveFDI are eligible borrowers underthe ECB window.

Any entity who is a resident of acountry which is FATF or InternationalOrganization of SecuritiesCommissions (IOSCO) compliant willbe treated as a recognised lender.

WHO ARE ELIGIBLE?

Foreign DirectInvestment

WHY IN NEWS?

The RBI has decided to relaxnorms for funds raised via theexternal commercial borrowing

route by companies and non-banking finance companies.