No prior RBI approval for ECB changes: Name of Borrower or Currency or Repayment or Bank after allotment of LRN, if other Terms are same ~ See Yes -> Yes, ACS

Wednesday, February 10, 2010

No prior RBI approval for ECB changes: Name of Borrower or Currency or Repayment or Bank after allotment of LRN, if other Terms are same

External Commercial Borrowings (ECB) Policy – Liberalisation vide RBI/2009-10/311 A. P. (DIR Series) Circular No.33 dated 9th February 2010
As per the extant ECB procedures, any changes or amendment in the terms and conditions of the ECB after obtaining the Loan Registration Number (LRN) from the Department of Statistics and Information Management (DSIM), Reserve Bank, require the prior approval of the Reserve Bank. Accordingly, the requests of the borrowers for changes in the terms and conditions, such as, drawdown / repayment schedules, currency of borrowing and changes in designated AD bank, name of the borrowing company, etc. are referred to the Reserve Bank for necessary approval.

As a measure of simplification of the existing procedures, it has been decided to delegate powers to the designated AD category-I banks to approve the following requests from the ECB borrowers, subject to specified conditions:
a) Changes / modifications in the drawdown / repayment schedule (maintaining Average Maturity Period)
Designated AD Category – I banks may approve changes / modifications in the drawdown / repayment schedule of the ECBs already availed, both under the approval and the automatic routes, subject to the condition that the average maturity period, as declared while obtaining the LRN, is maintained. The changes in the drawdown / repayment schedule should be promptly reported to the DSIM, Reserve Bank in Form 83. However, any elongation / rollover in the repayment on expiry of the original maturity of the ECB would require the prior approval of the Reserve Bank.
b) Changes in the currency of borrowing (with same terms)
Designated AD Category I banks may allow changes in the currency of borrowing, if so desired, by the borrower company, in respect of ECBs availed of both under the automatic and the approval routes, subject to all other terms and conditions of the ECB remaining unchanged. Designated AD banks should, however, ensure that the proposed currency of borrowing is freely convertible.
c) Change of the AD bank (with NoC & Due Diligence)
Designated AD Category - I banks may allow change of the existing designated AD bank by the borrower company for effecting its transactions pertaining to the ECBs subject to No-Objection Certificate (NOC) from the existing designated AD bank and after due diligence.
d) Changes in the name of the Borrower Company (with Evidence)
Designated AD Category - I banks may allow changes in the name of the borrower company subject to production of supporting documents evidencing the change in the name from the Registrar of Companies (Name Approval Letter [pursuant to e-form 1A] with Fresh Certificate of Incorporation [pursuant to e-form 1B]).