ECBs from foreign equity holder relaxed
The Reserve Bank of India (RBI) has permitted all eligible borrowers to avail of ECB under the approval route from their foreign equity holder company with minimum average maturity of 7 years for general corporate purposes subject to the following conditions:
- Minimum paid-up equity of 25 per cent should be held directly by the lender;
- Such ECBs would not be used for any purpose not permitted under the extant ECB guidelines (including on-lending to their group companies / step-down subsidiaries in India); and
- Repayment of the principal shall commence only after completion of minimum average maturity of 7 years. No prepayment will be allowed before maturity.