Simplification of Procedure for External Commercial Borrowings (ECB) from Foreign Equity Holder
The Reserve Bank of India (RBI) has simplified the procedure for Indian companies to raise External Commercial Borrowings (ECB) from their foreign equity holders.
The changes aim to improve the ease of doing business and reduce the compliance burden on companies. The key modifications are:
- Single Form: A single form (Form ECB) will replace the existing multiple forms, making it easier to report ECB transactions.
- Online Filing: The Form ECB will be filed online through the RBI’s website, eliminating the need for physical submission.
- Auto-Generated UIN: Upon successful submission of the Form ECB, a Unique Identification Number (UIN) will be auto-generated, which can be used for all future ECB transactions.
- Simplified Reporting: The reporting requirements have been simplified, with the removal of the need to submit a separate request letter and other supporting documents.
- Reduced Documentation: The documentation requirements have been reduced, with the removal of the need to submit certified copies of the loan agreement and other documents.
The new procedure will come into effect from the date of the circular, and all existing ECB borrowers are required to migrate to the new system within a period of six months from the date of the circular.
The RBI has also clarified that all other existing guidelines and regulations related to ECBs will continue to apply, unless specifically modified or relaxed.
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Download: External Commercial Borrowings (ECB) from Foreign Equity Holder – Simplification of Procedure