RBI - ECB Policy - Facility for Resolution Applicants under Corporate Insolvency Resolution Process

1. P a g e 1 | 1
REGULATORY BULLETIN
7th February, 2019
DISCLAIMER:
This article provides general information only. It is not intended as professional and/or financial advice nor does any information in this article constitute a comprehensive or
complete statement of the matters discussed or the law relating thereto. The information presented in this article is subject to change without notice. It may therefore not be
accurate or current. The information in this newsletter is not intended as an offer or recommendation to buy, sell or call on any security, product, service or investment. Beacon’s
Research team examines and updates the information in this article regularly. In spite of all our care and work, data still can have changed since our last update. Data presented may
not be accurate or up to date due to such changes or due to other reasons. Therefore, Beacon does not accept any liability or guarantee for the accuracy or completeness of the
information presented here and does not warrant that the information is up to date.
Beacon Trusteeship Ltd.
Head Off.:
4C & D, Siddhivinyak Chambers,
Gandhi Nagar,
Opp. M.I.G. Cricket Club,
Bandra East, Mum. - 400 051.
022 2655 8759
contact@beacontrustee.co.in
www.beacontrustee.co.in
A S.E.B.I. Registered & ISO 9001|2015 Certified Debenture Trustee.
RBI/2018-19/121
A.P. (DIR Series) Circular No. 18
Background:
As per para 2(viii) of extant “External Commercial Borrowings (ECB) Policy – New ECB Framework,
ECB proceeds cannot be utilized for repayment of Rupee Loans, except when the ECB is availed
from a Foreign Equity Holder as defined in the aforesaid framework.
Amendment:
On review of existing market conditions & in consultation with Govt. of India, it has been decided
to relax the end-use restrictions for resolution applicants under the Corporate Insolvency
Resolution Process (CIRP) and allow them to raise ECBs from the recognized lenders, except the
branches/ overseas subsidiaries of Indian banks, for repayment of Rupee term loans of the target
company under the approval route.
All other provisions of the ECB policy remain unchanged. AD Category - I banks should bring the
contents of this circular to the notice of their constituents and customers. The amended ECB policy
will come into force with immediate effect.
Resolution applicant means any person who submits a resolution plan to the resolution
Professional. Resolution plan is like a Revival plan for an insolvent company presented by anyone
eligible under the code. It shall contain all details of restructuring of business operations, financial
re-engineering and thereby making the company prosper from the condition of Insolvency.
Click here to download the Circular!