External Commercial Borrowing norms eased for NBFC and other Companies

Reserve Bank of India (RBI) vide its notification no. A.P. (DIR Series) Circular No. 04 dated 30 July 2019 has eased the end-use restriction relating to Working Capital requirements, General Corporate purposes and Repayment of rupee loans.

Now, eligible borrowers can raise ECB from recognised lenders, except foreign branches/ overseas subsidiaries of Indian banks in the following manner:

Eligible Borrower*	Purpose	Minimum Average Maturity	Recognised Lender*
All Eligible Borrower	working capital, general corporate purposes	minimum maturity of 10 years	All other than equity holder
All Eligible Borrower	working capital, general corporate purposes	minimum maturity of 5 years	#Foreign equity holder
NBFC	On lending for usage of working capital, general corporate purposes	minimum maturity of 10 years	All recognised lenders
All Eligible Borrower	repayment of Rupee loans availed domestically for purposes other than capital expenditure	minimum maturity of 10 years	All recognised lenders
NBFC	Onlending for repayment of Rupee loans availed domestically for purposes other than capital expenditure	minimum maturity of 10 years	All recognised lenders
All Eligible Borrower	repayment of Rupee loans availed domestically for  capital expenditure	minimum maturity of 7 years	All recognised lenders
Eligible Corporate Borrower (Infrastructure and Manufacturing Sector)	repayment of rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector if classified as SMA-2 or NPA, under any one time settlement with lenders	As per prevailing ECB Regulations	All recognised lenders

*Note:

Eligible Borrowers:- This has been expanded to include all entities eligible to receive FDI. Additionally, Port Trusts, Units in SEZ, SIDBI, EXIM Bank, registered entities engaged in micro-finance activities, viz., registered not for profit companies, registered societies / trusts/ cooperatives and non-government organisations can also borrow under this framework.

Recognised Lender: The lender should be resident of FATF or IOSCO compliant country. Multilateral and Regional Financial Institutions, Individuals and Foreign branches / subsidiaries of Indian banks can also be lenders