External commercial borrowings

yes, ecb can easily be availed by the subsidiary in india which is in fact an indian company in terms of Companies act. the transaction can be done only through tthe the route of Authorised Dealer.

ECB up to USD 5 million – minimum equity of 25 per cent held directly by the lender,

ECB more than USD 5 million – minimum equity of 25 per cent held directly by the lender and debt-equity ratio not exceeding 4:1(i.e. the proposed ECB not exceeding four times the direct foreign equity holding).

The minimum average maturity period should be three years since USD up to 20 million should have a minimum maturity of three years. Prepayment of ECB up to USD 400 million may be allowed by AD banks without prior approval of RBI subject to compliance with the stipulated minimum average maturity period as applicable to the loan.                                                                                                                            

Hi Manish,

Thanks for the response.