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    End Use of External commercial Borrowing

    Posted By : Ruchi / Published on : 27-Aug-2022 05:06 AM / View : 341 / Comment : 1

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    Can ECB be availed of for making equity investment domestically or buying goodwill?
    Read more on : borrowing commercial external

    • Hi Ruchi!

      Under the External Commercial Borrowings (ECB) Policy, RBI has prescribed certain restrictions on the use of ECB.

      The Negative list, for which the ECB proceeds cannot be utilised, would include the following:-

      a) Real Estate Activities;

      b) Investment in Capital Market;

      c) Equity Investment;

      d) Working capital purposes except from foreign equity holder.

      e) General Corporate purposes except from foreign equity holder.

      f) Repayment of Rupees Loans except from foreign equity holder;

      g) on-lending to entities for the above activities.

      Therefore, ECB cannot be availed of for making equity investment either directly or indirectly (through purchase of goodwill).

      Hope it is clear!

      Thanks!

      29-08-2022 / 05:06:37 AM
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