RBI relaxes rules on External Commercial Borrowings (ECB)
The Reserve Bank of India relaxed rules for rescheduling/restructuring of ECBs by permitting an increase in the total cost of borrowing offshore. In suppression of earlier provisions, the banking regulator has delegated powers to the designated AD category-I banks to allow changes/modification in the draw-down and repayment schedules notwithstanding the average maturity period or changes…
Read articleRelaxation of External Commercial Borrowings (ECB) in Indian Rupees
With a view to providing greater flexibility for structuring of External Commercial Borrowings (ECB) arrangements, it has been decided by RBI that all recognised non-resident ECB lenders may extend loans in Indian Rupees by mobilising Indian Rupees through swaps undertaken with an Authorised Dealer Category I bank in India. At present all eligible borrowers are…
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Updated guidelines on raising loans through External Commercial Borrowing (ECB)
The revised guidelines on External Commercial Borrowing are as per the updated circular of RBI as of December 22, 2023. In simple terms, External Commercial Borrowings (ECB) means commercial borrowings availed (in the form of bank loans, trade credits, and securitized instruments) from external sources (from abroad) with a minimum average maturity of three years.…
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Security for External Commercial Borrowings (ECB)
The extant ECB guidelines allow the local borrower to offer security to the overseas lender / supplier for securing ECB. According to the latest directions of RBI, AD Category-I banks may allow creation of charge on immovable assets, movable assets, financial securities and issue of corporate and / or personal guarantees in favour of overseas…
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Export Finance: A Strategic Enabler of International Trade
Export finance plays a pivotal role in facilitating international trade by providing exporters with the necessary financial resources to manage the production, shipment, and delivery of goods and services to overseas markets. It helps bridge the time lag between incurring export-related costs and receiving payment from foreign buyers, thereby supporting liquidity and sustaining trade momentum.…
What is the Gold Card Scheme for exporters?
On June 27, 2019, Reserve Bank of India notified all the banks (SCBs, SBs, LABs), excluding RRBs that the RBI is receiving complaints from exporters and their Associations that the banks are not extending the benefits under the Gold Card Scheme as per extant instructions. The Central bank therefore reiterated that the instructions relating to…
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