External Commercial Borrowing Consultation
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HERE'S HOW IT WORKS
Documents required for the purpose for bringing the external commercial Borrowings in India:-
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ECBs are commercial loans raised by eligible resident entities from recognised non-resident entities conforming to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
Any entity raising INR denominated ECB is not permitted to convert the liability arising out of INR ECB into foreign currency liability in any manner or assuming foreign currency risk is any manner by either entering into a derivative contract or otherwise.
ECB should have minimum average maturity period of 5 years.
ECB proceeds cannot be utilised for working capital purposes, general corporate purposes and repayment of Rupee loans except when the ECB is availed from foreign equity holder for a minimum average maturity period of 5 years.
Yes, However, the new ECB lenders should also be foreign equity holders as defined in the ECB framework and subject to applicable refinancing guidelines.
Earlier, the ECB Regulations specified that ECB could not be availed for investment in real estate or purchase of land.
ECB includes Loans, Securitized instruments, Buyers’ and supplier’s credit, Foreign Currency Convertible Bonds (FCCBs). Financial Lease and Foreign Currency Exchangeable Bonds (FCEBs).
1) Investment in real estate or purchase of land
2) Investment in capital market
3) Investment in capital market
All entities except a Limited Liability Partnership are allowed to obtain ECB as per the prescribed guidelines.