External Commercial Borrowings Policy -Indian companies permitted by RBI to raise fresh ECB/FCCB under the automatic route to refinance their outstanding FCCBs- July 2011

July 04, 2011: Keeping in view the need to provide a window to facilitate refinancing of FCCBs by the Indian companies who may be facing difficulty in meeting the redemption obligations, the Reserve Bank, in consultation with the Government of India, has decided to allow the Indian companies to refinance/ restructure the outstanding FCCBs issued by them. Accordingly, Indian companies are permitted to raise fresh ECB/FCCB as per the extant ECB guidelines under the automatic route to refinance their outstanding FCCBs.

Restructuring of FCCBs involving change in the existing conversion price is not permissible. Proposals for restructuring of FCCBs not involving change in conversion price will, however, be considered under the approval route depending on the merits of the proposal. This facility has come into force with immediate effect

Banks may allow Indian companies to refinance the outstanding FCCBs subject to compliance with the terms and conditions set out hereunder: -



Fresh ECBs/ FCCBs shall be raised with the stipulated average maturity period and applicable all-in-cost being as per the extant ECB guidelines;

The amount of fresh ECB/FCCB shall not exceed the outstanding redemption value at maturity of the outstanding FCCBs;

The fresh ECB/FCCB shall not be raised six months prior to the maturity date of the outstanding FCCBs ;

The purpose of ECB/FCCB shall be clearly mentioned as ‘Redemption of outstanding FCCBs’ in Form 83 at the time of obtaining Loan Registration Number from the Reserve Bank;

The designated AD - Category I bank should monitor the end-use of funds;



All other aspects of ECB policy under the automatic route, such as, eligible borrower, recognised lender, end-use, prepayment, refinancing of existing ECB and reporting arrangements shall remain unchanged;

ECB / FCCB beyond USD 500 million for the purpose of redemption of the existing FCCB will be considered under the approval route; and

ECB / FCCB availed of for the purpose of refinancing the existing outstanding FCCB will be reckoned as part of the limit of USD 500 million available under the automatic route as per the extant norms.


ECB norms relaxed for hotels, hospitals & IT cos ...Click here
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RBI relaxes the end-use of ECB policy-January 2010 ...Click here
RBI tightens some ECB norms for companies-Dec 2009 ...Click here
ECB policy relaxed for SEZ and NBFCs (June 2009) ...Click here
ECB Guidelines revision in January 2009 ...Click here
ECB Guidelines revision in October 2008 ...Click here
ECB Guidelines revision in September 2008 ...Click here


Special section on External Commercial Borrowings ...Click here
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