RBI effects automatic route for new ECBs up to $ 50 mn

Mumbai, Sept 4: The RBI has decided to operationalise the automatic route for fresh external commercial borrowings (ECBs) up to $50 million and all refinancing of existing ECBs with immediate effect.

Said the central bank in a statement issued here today: “Under the automatic route arrangement, any legal entity, registered under the Companies Act, Societies Registration Act, Co-operative Societies Act, including proprietorship and partnership concerns, will now be eligible to enter into loan agreements with overseas lender(s) for raising fresh ECB with an average maturity of not less than three years for an amount up to $50 million and for refinancing of an existing ECB contracted in compliance with both the ECB guidelines framed by the Ministry of Finance and the regulations issued by the Reserve Bank in this regard.

“Corporates would not be required to obtain prior approval for the purpose, it said.