Under the simplified procedure, the RBI has delegated powers to the banks (authorised to deal in foreign exchange) to make changes/modifications (irrespective of the number of occasions) in the draw-down and repayment schedules of the ECB raised both under the automatic and approval routes.

The abovementioned changes/modifications could either be associated with change/no change in the average maturity period and/or with changes (increase/decrease) in the all-in-cost.

ECBs are commercial loans availed from non-resident lenders with minimum average maturity of 3 years.

Banks can allow reduction in the amount of ECB (irrespective of the number of occasions) along with any changes in draw-down and repayment schedules, average maturity period and all-in-cost. They can also permit increase in all-in-cost of ECB, irrespective of the number of occasions.

However, the RBI said banks can permit changes/ modifications in the draw-down and repayment schedules of the ECB provided the revised average maturity period and/or all-in-cost is/are in conformity with the applicable ceilings/guidelines; and the changes are effected during the tenure of the ECB.

The central bank said banks may also allow the cases requiring transfer of the ECB from one company to another on account of re-organisation at the borrower’s level in the form of merger/demerger/amalgamation/acquisition after satisfying themselves that the company acquiring the ECB is an eligible borrower and ECB continues to be in compliance with applicable guidelines. (The Hindu)