External Commercial Borrowings (ECBs) in India are subject to specific reporting obligations to ensure transparency and regulatory compliance. The Reserve Bank of India (RBI), under the Foreign Exchange Management Act (FEMA), has prescribed a detailed framework for the reporting of ECB transactions. Adherence to these requirements is mandatory for all eligible borrowers.

1. Loan Registration Number (LRN)

Before any drawdown of funds or payment of fees/charges related to the ECB, the borrower must obtain a Loan Registration Number (LRN) from the RBI.

• The application for LRN is made by submitting a duly certified Form ECB to:
  • The Director, External Commercial Borrowings Division,
    Department of Statistics and Information Management (DSIM),
    Reserve Bank of India.
• The form must be routed through the Authorised Dealer (AD) Category-I bank.

2. Reporting Changes in ECB Terms

Any modification in the terms and conditions of the ECB—such as changes in amount, maturity, interest rate, end-use, or lender—must be reported to the RBI within seven working days of the change.

• Such changes are reported through the designated AD Category-I bank.
• Reporting is done using Form ECB-2, with relevant details of the amendment.

3. Monthly Reporting (Form ECB-2)

Borrowers are required to submit a monthly return (Form ECB-2) to the RBI, capturing all actual ECB-related transactions.

• The return must be submitted within seven working days from the end of the month to which it relates.
• If no transactions occurred during the reporting period, a nil return must still be submitted.
• The monthly return must be certified by the borrower and routed through the AD Category-I bank.

4. Submission Process

• The Form ECB-2 is submitted to the designated AD Category-I bank, which is responsible for:
  • Verifying the accuracy of the information provided.
  • Forwarding the report to the DSIM, RBI.
• Proper coordination with the AD bank is essential for timely and accurate reporting.

5. Key Considerations

• The reporting obligations apply to all types and categories of ECBs.
• Form ECB-2 must be completed in full:
  • Use “N.A.” (Not Applicable) for fields that do not apply.
  • All dates must be in the YYYY/MM/DD format.
• Late submission or non-compliance may attract regulatory penalties under FEMA provisions.

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