Review of External Commercial Borrowings (ECB) Policy

Circular. No. 04/2007-08-RB, DT. 07/08/2007 has been issued to insulate the economy from excessive capital inflow.

Key features of the instruction contained in this circular are:

(i) ECB more than USD 20 million - prior approval of RBI required

(ii) ECB more than USD 20 million shall not be used for domestic purpose

(iii) These restrictions are applicable per financial year.

(iv) ECB upto USD 20 million per borrowing company per financial year would be allowed to remit in India only after prior approval for rupree expenditure.

(v) All other aspects of ECB policy remain unchanged.

(vi)  These conditions will not apply to borrowers who have already entered into loan agreement and obtained loan registration numbers from the Reserve Bank.