As part of the efforts to improve the ease of doing business in India, the Reserve Bank of India (RBI), in consultation with Government of India has rationalized the existing External Commercial Borrowings (ECB) regulations, vide circular dated 16th January 2019. One of key amendments of the new ECB policy includes the expansion of list of eligible borrowers, which shall now include all the entities eligible to receive Foreign Direct Investment ('FDI') and will now be eligible to raise ECB from the recognized lenders. The major changes made via the new policies have been enlisted in this brief presentation by our firm.

1. Liberalisation of External Commercial Borrowings
(‘ECB’) Guidelines
A Snapshot by Coinmen Consultants LLP
January 2019

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ECB GUIDELINES - LIBERALISED
As a part of the on-going efforts at rationalising multiple regulations provided under
Foreign Exchange Management Act (‘FEMA’), 1999, the regulations pertaining to
borrowings and lending transactions between a person resident outside India and a
person resident in India have been revised and the same were notified by the Government
of India on 17th December 2018
With a view to further improve the ease of doing business in India, the Reserve Bank of
India (‘RBI’) in consultation with the Government of India has decided to further rationalise
the extant framework for ECB and Rupee Denominated Bonds.
In view of the same, an A.P. (DIR Series) Circular No. 17 on the new ECB policy has been
issued on 16th January 2019 incorporating the new framework The new framework is
instrument neutral and would further strengthen the AML/CFT framework.
The key changes in the new ECB policy in comparison with the erstwhile regime have been
highlighted in the subsequent slides.
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KEY CHANGES – MERGER OF TRACKS
Track I & II
Track III & Rupee
Denominated Bonds
Foreign Currency Denominated Bonds
Rupee Denominated ECB
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KEY CHANGES – MERGER OF TRACKS
KEY
CHANGES
EARLIER FRAMEWORK REVISED FRAMEWORK IMPACT
Eligible
Borrowers
 Specified entities such as
Companies in
manufacturing sector and
software developments,
Shipping and airline
companies, Real Estate
Investment Trusts and
Infrastructure Investment
Trusts etc.
 All entities eligible to Foreign
Direct Investment (‘FDI’);
 Other entities like Port Trusts,
Units in SEZ, registered entities
engaged in micro finance
activities, viz, registered not for
profit companies, registered
societies,/trusts/cooperatives
and Non-Government
Organisations (permitted only
to raise INR ECB)
 Entities such as Limited
Liability Partnerships,
trading concerns which
were not eligible to raise
ECBs earlier should now
be eligible to raise ECB.
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KEY CHANGES – MERGER OF TRACKS
KEY CHANGES EARLIER FRAMEWORK REVISED FRAMEWORK IMPACT
Recognised
Lenders/Investors
 Institutions such as
International banks,
International capital
markets., Export credit
agencies, suppliers of
equipment., foreign equity
holders
 Should be resident of FATF
or IOSCO compliant country;
 Multilateral and Regional
Financial Institutions where
India is a member country;
 Individuals only if foreign
equity holders or for
subscription to
bonds/debentures listed
abroad; and
 Now eligible lender
must be a resident of
Financial Action Task
Force (FATF) or
International
Organisation of
Securities
Commissions (IOSCO)
compliant country.
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TAX AND REGULATORY SERVICESKEY CHANGES – MERGER OF TRACKS
KEY CHANGES EARLIER FRAMEWORK REVISED FRAMEWORK IMPACT
Minimum
Average Maturity
Period (MAMP)
Minimum maturity period
used to vary from 1 – 10
years depending upon the
Track under which ECB was
availed
Manufacturing Sector: 1 Year
for ECB upto USD 50 Million or
its equivalent per financial year;
Foreign Equity Holder: 5 years,
if utilised for working capital
purposes, general corporate
purposes or repayment of
Rupee Loans;
Others: 3 years
Minimum Average
Maturity period relaxed.

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The information contained in this document does not constitute financial, legal, tax, or
other professional advice. You should not act upon the information contained in this
publication without obtaining specific professional advice.
This document is not intended as an offer or solicitation for business to anyone in any
jurisdiction; and shall not be copied, reproduced, transmitted or further distributed by
any recipient.
Although prepared with extreme care, Coinmen Consultants LLP does not guarantee,
represent, or warrant (express or implied) to this document’s accuracy or completeness,
and under no circumstances will be liable for any loss caused by reliance on any opinion
or statement made in this document.
The materials contained in this publication were assembled in January 2019 and were
based on the laws enforceable, and the information available at that time.
DISCLAIMER

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+91 - 11 - 4016 - 0160 | www.coinmen.in
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© Coinmen Consultants LLP
TAX AND REGULATORY SERVICES
Nitin Garg
Partner
nitin@coinmen.in
+919899146777