Corporate Law Alert - March 2, 2012

External Commercial Borrowing

The Reserve Bank of India (RBI) has vide A.P. (DIR Series) Circular No. 75 dated February 7, 2012 simplified certain processes relating to External Commercial Borrowing (ECB) which are as follows:

(a) Reduction in the Amount of ECB

Designated AD Category – I Banks (AD Category – I Banks) can now approve the requests for reduction in the amount of the ECB availed under the automatic route subject to the satisfaction of the following conditions:

1. The consent of the lender for reduction in loan amount has been obtained;
2. The average maturity period of the ECB is maintained;
3. The monthly ECB-2 returns in respect of the Loan Registration Number (LRN) have been submitted to the Department of Statistics and Information Management (DSIM); and