Below the brand new norms, eligible debtors can now elevate ECBs as much as the upper of $1 billion in excellent borrowings or 300% of web value based mostly on the newest audited standalone steadiness sheet. The sooner borrowing cap was $750 million. The modifications come at a time when India’s ECB volumes have been going up over the previous few years. Indian corporations had raised a report $61 billion via ECB route in FY25 up from $48 billion raised in FY24.
RBI has stated that non-fund based mostly services and mandatorily convertible fairness devices can be excluded from the borrowing cap calculation.
The central financial institution has stated that the funds can have a minimal common maturity interval of three years. It has allowed producers to lift as much as $150 million with maturities between one and three years.
The pricing norms can be aligned extra intently with market benchmarks. ECBs with maturities under three years will comply with price ceilings prescribed for commerce credit. For fixed-rate loans, the all-in-cost ceiling will consider floating benchmarks plus relevant swap spreads.
ECB proceeds meant for rupee expenditure have to be parked in an INR account inside one month, with surplus funds deployable in unencumbered mounted deposits for as much as a 12 months. Funds supposed for international foreign money expenditure may be retained in home or abroad international foreign money accounts and invested in short-term debt devices with authentic maturity of as much as one 12 months.
There are restriction on end-use of borrowed funds for use for the needs of chit funds, Nidhi firm, reat property enterprise and development of farmhouse, agricultural and animal husbandry.
