home page 



Daily Rates

Bank Holidays

Book Store





  ECBs   overview | coop banks | basics | lending |adv banking | products | IT & banking  
daily news | banking software| bank directory| internet banking| IT directory| Banknet Jobs

Banking > Lendings > Global Lendings > Syndicated Credits > ECB

External Commercial Borrowings (ECB)

External Commercial Borrowings (ECBs) include bank loans, suppliers' and buyers' credits, fixed and floating rate bonds (without convertibility) and borrowings from private sector windows of multilateral Financial Institutions such as International Finance Corporation. Euro-issues include Euro-convertible bonds and GDRs.

In India, External Commercial Borrowings are being permitted by the Government for providing an additional source of funds toIndian corporates and PSUs for financing expansion of existing capacity and as well as for fresh investment, to augment theresources available domestically. ECBs can be used for any purpose (rupee-related expenditure as well as imports) except for investment in stock market and speculation in real estate.

External Commercial Borrowings (ECB) are defined to include

commercial bank loans,
buyer’s credit,
supplier’s credit,
securitised instruments such as floating rate notes, fixed rate bonds etc.,
credit from official export credit agencies,
commercial borrowings from the private sector window of multilateral financial institutions such as IFC, ADB, AFIC, CDC etc.
and Investment by Foreign Institutional Investors (FIIs) in dedicated debt funds

Applicants are free to raise ECB from any internationally recognised source like banks, export credit agencies, suppliers of equipment, foreign collaborations, foreign equity - holders, international capital markets etc.


The department of Economic Affairs, Ministry of Finance, Government of India with support of Reserve Bank of India, monitors and regulates Indian firms access to global capital markets. From time to time, they announce guidelines on policies and procedures for ECB and Euro-issues.


The important aspect of ECB policy is to provide flexibility in borrowings by Indian corporates, at the same time maintaining prudent limits for total external borrowings. The guiding principles for ECB Policy are to keep maturities long, costs low, and encourage infrastructure and export sector financing which are crucial for overall growth of the economy.

The ECB policy focuses on three aspects:

  1. Eligibility criteria for accessing external markets.
  2. The total volume of borrowings to be raised and their maturity structure.
  3. End use of the funds raised.

Detailed ECB guidelines were announced in July 1999... Click here

Since July 1999, various modifications & relaxations had been made in the Guidelines by the the Indian Government and Reserve Bank of India. In this section you get access to all the changes made in the ECB Guidelines (1999-2010) ...Click here

News Feeds LinkedIn Banknet Group Banknet on Facebook Banknet Twitter


Advertise | Book Store | About us | Contact us | Terms of use | Disclaimer

© Banknet India | All rights reserved worldwide.
Best viewed with IE 4.00 & above at a screen resolution of 800 x 600 or higher