The Revised External Commercial Borrowing Framework

The key changes made to the External Commercial Borrowing Framework to give the necessary impetus to the infrastructure sector

The Reserve Bank of India (RBI) has on November 30, 2015 issued Notification No. RBI/2015 – 16/255 A.P. (DIR Series) Circular No. 32 (RBI ECB Circular), to bring into effect necessary changes made to the existing external commercial borrowings (ECB) framework in India, keeping in mind the emerging financing needs of the Indian resident entities and developments in the Indian economy. The RBI ECB Circular provides for the three routes for raising borrowings from recognised non – resident entities, comprising of: (i) medium term foreign currency denominated ECB with minimum average maturity (MAM) of three or five years (Option I); (ii) long term foreign currency denominated ECB with MAM of 10 years (Option II); and (iii) Indian rupees denominated ECB with MAM of three or five years (Option III).