What changed
Previously, services sector entities were not eligible for ECB under Automatic Route. Now, hotels, hospitals, and software companies can access ECB up to USD 100 million per financial year under Approval Route, specifically for importing capital goods. The existing trade credit facility of USD 20 million per import transaction for capital goods remains in place.
What it means for you
Banks can now process ECB applications from eligible services sector clients under Approval Route, expanding lending opportunities. This liberalisation supports capital expenditure in hospitality, healthcare, and IT sectors, potentially boosting demand for foreign currency loans. Banks must ensure compliance with all other ECB policy aspects and route approvals through RBI.
What you must do
- Update internal ECB policy documents to include services sector eligibility under Approval Route.
- Inform eligible clients (hotels, hospitals, software firms) about the new USD 100 million ECB facility.
- Ensure all ECB applications for services sector are routed through Approval Route and comply with existing ECB guidelines.
- Continue to process trade credit up to USD 20 million per import for capital goods as per existing norms.
Who it affects
Authorised Dealer Category - I banks, Hotels, hospitals, and software companies seeking ECB, Borrowers in services sector importing capital goods
Which services sector entities are now eligible for ECB?
Hotels, hospitals, and software companies can avail ECB up to USD 100 million per financial year under Approval Route for importing capital goods.
Does this circular change the trade credit limits?
No, the existing trade credit limit of USD 20 million per import transaction for capital goods, for less than 3 years, remains unchanged.
What route must be used for these ECBs?
These ECBs must be availed under the Approval Route, not the Automatic Route.