B. External Commercial Borrowings (ECB)/Debt:

1. ECB are commercial loans raised by eligible resident entities from recognized Non-Resident entities and should conform to parameters such as
   
   
   1. Minimum maturity
   2. Permitted and non-permitted end users
   3. Maximum all in costs sealings.
      
      
2. Forms of ECBs: Loans including bank loans; floating fixed rates notes/bonds/debentures, trade credits beyond three years.
   
   
3. Eligible borrowers: All entities eligible to receive FDI are eligible to receive ECBs.
   
   
4. Recognized lenders:
   
   
   1. Multilateral and Regional Financial Institutions where India is a member country
   2. Individuals as lenders can only be permitted if they are foreign equity holders or for subscription to bonds/debentures listed abroad; and
   3. Foreign branches / subsidiaries of Indian banks are permitted as recognized lenders only for FCY ECB.
      
      
5. Minimum average maturity period (MAMP): MAMP for ECB will be 3 years. Call and put options, if any, shall not be exercisable prior to completion of minimum average maturity. However, for the specific categories mentioned below, the MAMP will be as prescribed therein:years. Call and put options, if any, shall not be exercisable prior to completion of minimum average maturity. However, for the specific categories mentioned below, the MAMP will be as prescribed therein:
   
   

   Sr.No.	Category	MAMP
   (a)	ECB raised by manufacturing companies up to USD 50 million or its equivalent per financial year.	1 year
   (b)	ECB raised from foreign equity holder for working capital purposes, general corporate purposes or for repayment of Rupee loans	5 years
   (c)	ECB raised for (i) working capital purposes or general corporate purposes (ii) on-lending by NBFCs for working capital purposes or general corporate purposes	10 years
   (d)	ECB raised for (i) repayment of Rupee loans availed domestically for capital expenditure (ii) on-lending by NBFCs for the same purpose	7 years
   (e)	ECB raised for (i) repayment of Rupee loans availed domestically for purposes other than capital expenditure (ii) on-lending by NBFCs for the same purpose	10 years
   for the categories mentioned at (b) to (e) – (i) ECB cannot be raised from foreign branches / subsidiaries of Indian banks (ii) the prescribed MAMP will have to be strictly complied with under all circumstances.

6. All in cost celling per annum:
   
   Benchmark Rate plus 550 bps spread: For existing ECBs linked to LIBOR whose benchmarks are changed to ARR. Benchmark rate plus 500 bps spread: For new ECBs.
   
   
7. Negative List for ECB proceeds:
   
   The negative list, for which the ECB proceeds cannot be utilised, would include the following:
   
   a) Real estate activities.
   b) Investment in capital market.
   c) Equity investment.
   d) Working capital purposes, except in case of ECB mentioned at v(b) and v(c) above.
   e) General corporate purposes, except in case of ECB mentioned at v(b) and v(c) above.
   f) Repayment of Rupee loans, except in case of ECB mentioned at v(d) and v(e) above.
   g) On-lending to entities for the above activities, except in case of ECB raised by NBFCs as given at v(c), v(d) and v(e) above.
   
   Note:
   a. Assuming the ECB is in foreign currency denominated bond.
   b. Automatic route: If all the above conditions are met, debt in the form of ECB can be availed by the Indian entities under automatic route.
   c. Approval route: In case any of the aforementioned conditions are not fulfilled, seeking approval from the Reserve Bank of India (RBI) is necessary.