The Reserve Bank of India (RBI) has libralised External Commercial Borrowings (ECB) norms on various issues, the details of which are given below:
Repayment of Rupee loans
In furtherance to the circulars dated 23rd September, 2011 and 20th April 2012 regarding liberalization of ECB norms for infrastructure sector and power sector, with respect to repayment of rupee loan, RBI has further liberalized the norms for both the sector. In this regard, RBI has allowed Indian companies (Power and Infrastructure Sector) to raise ECB for repayment of rupee loan(s) availed from domestic banking system and/ or for fresh rupee capital expenditure, under approval route, subject to the following conditions:
Such companies should have been a consistent foreign exchange earner during the past three financial years,
Such companies are not in default list/ caution list of the Reserve Bank of India,
The ECB shall be utilized only for repayment of rupee loan availed of for “capital expenditure” incurred earlier and are still outstanding in the books of domestic banking system and/ or fresh rupee capital expenditure
Limits
The overall ceiling of above mentioned ECBs shall be USD 10 (ten) billion subject 50% of average annual export earnings realized during past 3 financial years
Requirements
The Companies seeking to avail ECB, may submit Form ECB through their Authorized Dealer Bank along with the following:
Certificate from the statutory auditor regarding utilization of rupee loan(s) w.r.t ‘capital expenditure’ incurred earlier,
Certificate from the statutory auditor that the Company is a consistent net foreign exchange earner during the past three financial years,
The outstanding rupee loan(s) shall be certified by the domestic lending bank(s) and the designated authorized dealer bank.
The Company shall draw down the entire facility within a month after obtaining Loan registration Number from the Reserve Bank.
Rationalization of Form 83
The Indian companies proposing to avail ECB are required to obtain Loan Request Number by submitting the revised Form 83 to Reserve Bank of India. The Reserve Bank of India has rationalized the Form 83 vide circular no —– dated and has come out with the new format. Major changes are:
The Instruction have been given at the end the revised format i.e. Annex I.
Annex II – showing the method to calculate Average Maturity period is added.
Form has to be addressed to The Director, Balance of Payments Statistics Division, Department of Statistics and Information Management (DSIM), Reserve Bank of India, C-8-9 Bandra-Kurla Complex, Mumbai- 400 051.
Separate Parts have been categorized for the details of Lenders, Borrowers, Loan, Charges, ECB already availed.