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    External Commercial Borrowings (ECBs)

    Posted By : CS Shiriti / Published on : 16-Mar-2018 11:23 PM / View : 532 / Comment : 2

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    Whether External Commercial Borrowings (ECBs) are exempted borrowings i.e. outside the purview of public deposit ?
    Read more on : ecbs borrowings commercial external

    • Rule 2 (c) Deposit under co act 2013 – does not include 

       

      (ii) any amount received from foreign Governments, foreign or international banks, multilateral financial institutions foreign Governments owned development financial institutions, foreign export credit agencies, foreign collaborators, foreign bodies corporate and foreign citizens, foreign authorities or persons resident outside India subject to the provisions of Foreign Exchange Management Act, 1999 (42 of 1999) and rules and regulations made there under; 

      • Loan from PRIO  

      • Loan from members beyond permissible limit under Co. Act 

      • Loan from Director / Relative of Director 

      • Export Advance

      • Loan including Bank Loans ¡ Securitized Instruments  & i¡ Non-convertible, Optionally convertible or Partially convertible Preference Shares / Debentures ¡ Buyers’ Credit / Suppliers’ Credit ¡ FCCB / FCEB ¡ Financial Lease

       

      However, ECB framework is not applicable in respect of the investment in Nonconvertible Debentures (NCDs) in India made by Registered Foreign Portfolio Investors (RFPIs).

       

      09-09-2022 / 06:18:43 AM
      Reply
    • Minimum Average Maturity Period (MAMP) MAMP for ECB will be 3 years. Call and put options, if any, shall not be exercisable prior to completion of minimum average maturity. However, for the specific categories mentioned below, the MAMP will be as prescribed therein:

      Sr.No. Category MAMP
      (a) ECB raised by manufacturing companies up to USD 50 million or its equivalent per financial year. 1 year
      (b) ECB raised from foreign equity holder for working capital purposes, general corporate purposes or for repayment of Rupee loans 5 years
      4(c) ECB raised for
      (i) working capital purposes or general corporate purposes
      (ii) on-lending by NBFCs for working capital purposes or general corporate purposes
      10 years
      (d) ECB raised for
      (i) repayment of Rupee loans availed domestically for capital expenditure
      (ii) on-lending by NBFCs for the same purpose
      7 years
      (e) ECB raised for
      (i) repayment of Rupee loans availed domestically for purposes other than capital expenditure
      (ii) on-lending by NBFCs for the same purpose
      10 years
      for the categories mentioned at (b) to (e) –
      (i) ECB cannot be raised from foreign branches / subsidiaries of Indian banks
      (ii) the prescribed MAMP will have to be strictly complied with under all circumstances.
      09-09-2022 / 06:22:24 AM
      Reply
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