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External Commercial Borrowings (ECB) Policy - Revised

The External Commercial Borrowing (ECB) policy is constantly reviewed by the Government in consultation with the Reserve Bank of India (RBI) to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, the external sector and the lessons of experience.

2. Based on the review, the ECB policy is modified on 21st May 2007, as indicated below:

(a) End-use - As per the extant ECB policy, utilisation of ECB proceeds is not permitted in real estate. The term ‘real estate’ excludes development of integrated township as defined by Press Note 3 (2002 Series) dated January 4, 2002. It has now been decided to withdraw the exemption accorded to the 'development of integrated township' as a permissible end-use of ECB. Accordingly, utilisation of ECB proceeds is not permissible in real estate, without any exemption.

(b) All-in-cost ceilings - With the sovereign credit ratings of India enhanced to investment grade, the all-in-cost ceilings for ECB are modified as follows:

Average Maturity Period and All-in-Cost ceilings over 6 Months LIBOR*

Three years and up to five years
200 basis points (Existing)
150 basis points (Revised)

More than five years
350 basis points (Existing)
250 basis points (Revised)

* for the respective currency of borrowing or applicable benchmark

3. The above changes will apply to ECB both under the automatic route as well as approval route with immediate effect and is subject to review.

ECB Guidelines revision in Dec 2006 ...Click here
Special section on External Commercial Borrowings ...Click here



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