Like Euro Issue,
external commercial borrowing is the way to get finance outside India.
It is the loan which is taken by Indian corporation from foreign banks
and outside private financial institutions.
Because money is coming in the form of debt from outside in external commercial borrowing (ECB), RBI and Ministry of finance will monitor it for stopping any black money. If there is any infrastructure which is made by Indian companies with ECB, only 50% ecb can be used and rest company should use its own capital.
Borrower can use only 25% of ECB for repaying old debt. Not more than 25% allowed for this purpose.
As per RBI following are the rules which will apply on external commercial borrowings.
1. Eligible Borrowers
Only big corporation like hotels, corporations in health industries, non banking financial companies and infrastructure providing companies. Not-for-profit organisation like our accounting education organisation is not eligible for getting external commercial borrowings.
2. Recognized Lenders
ECB's lenders should be recognized by RBI. In this, following are eligible.
a) International Banks
b) International Financial Corporation (IFC)
c) Other recognized by RBI
3. Amount and Maturity
Total Maximum amount is $ 750 Million
Hotel, hospitals and software companies can raise more than this debt limit through ECB.
Maximum period for Repaying = 7 years
Because money is coming in the form of debt from outside in external commercial borrowing (ECB), RBI and Ministry of finance will monitor it for stopping any black money. If there is any infrastructure which is made by Indian companies with ECB, only 50% ecb can be used and rest company should use its own capital.
Borrower can use only 25% of ECB for repaying old debt. Not more than 25% allowed for this purpose.
As per RBI following are the rules which will apply on external commercial borrowings.
1. Eligible Borrowers
Only big corporation like hotels, corporations in health industries, non banking financial companies and infrastructure providing companies. Not-for-profit organisation like our accounting education organisation is not eligible for getting external commercial borrowings.
2. Recognized Lenders
ECB's lenders should be recognized by RBI. In this, following are eligible.
a) International Banks
b) International Financial Corporation (IFC)
c) Other recognized by RBI
3. Amount and Maturity
Total Maximum amount is $ 750 Million
Hotel, hospitals and software companies can raise more than this debt limit through ECB.
Maximum period for Repaying = 7 years
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