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ARTICLE · 05 FEBRUARY 2015

RBI Relaxes ECB Norms

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Reserve Bank of India (RBI) vide RBI/2014-15/377 A.P. (DIR Series) Circular No. 55 dated January 01, 2015 has issued a circular relating to creation of charge over securities for External Commercial Borrowings (ECB).

IndiaFinance and Banking
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Reserve Bank of India (RBI) vide RBI/2014-15/377 A.P. (DIR Series) Circular No. 55 dated January 01, 2015 has issued a circular relating to creation of charge over securities for External Commercial Borrowings (ECB).

In the existing guidelines, the choice of security to be provided to the overseas lender or the supplier for securing ECB is left to the borrower.

In order to liberalise and expand the options of securities and to consolidate various provisions related at one place, it has been decided that 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 lender / security trustee, to secure the ECB to be raised / raised by the borrower, subject to satisfying themselves that:

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