External Commercial Borrowing

What Is External Commercial Borrowing?

An External Commercial Borrowing is a loan raised by an Indian entity from a recognised lender outside India, in foreign currency or in rupees. It is used where overseas funding is cheaper or longer-tenured than domestic credit, or where an overseas parent wants to fund its Indian subsidiary directly.

ECB is a regulated route. Eligible borrowers, recognised lenders, minimum average maturity, all-in cost and permitted end-uses are all governed by the RBI framework in force, and every transaction is reported to the RBI through an authorised dealer bank. Project Funding India works with the borrower, the lender and the AD bank to keep a transaction inside that framework.

Key Features & Benefits

• Access to overseas lenders, including a foreign parent or group company
• Tenure often longer than comparable domestic credit
• Foreign-currency or rupee-denominated structures
• Hedging discussed at structuring, not left as an afterthought
• End-to-end coordination with the authorised dealer bank

Eligibility Criteria

• Entity eligible to borrow under the RBI ECB framework in force
• A recognised overseas lender
• End-use falling within the permitted list
• Compliance with minimum average maturity and all-in-cost limits

End Use Of Funds

• Capital expenditure and imported capital goods
• New projects and expansion
• Refinancing of existing eligible borrowing
• Other end-uses permitted under the framework in force