What changed
The definition of 'Infrastructure sector' for External Commercial Borrowings (ECB) has been expanded to include mining, exploration, and refining, in addition to the existing seven categories (power, telecom, railways, roads, ports, industrial parks, urban infrastructure). This change is effective from October 8, 2008. All other ECB policy parameters—such as the USD 500 million automatic route limit, eligible borrowers, end-use norms, and maturity periods—remain unchanged.
What it means for you
Banks can now process ECB applications from mining, exploration, and refining companies under the same automatic route framework as other infrastructure borrowers. This opens up a new lending avenue for these sectors, which previously had to rely on more restrictive ECB norms. Lenders should update their internal ECB eligibility checklists and advise clients in these sectors about the expanded definition.
What you must do
- Update internal ECB policy documents to include mining, exploration, and refining under the infrastructure sector definition.
- Inform corporate clients in mining, exploration, and refining sectors about their new eligibility for ECB under the automatic route.
- Ensure all ECB applications from these sectors are processed with the same due diligence as other infrastructure borrowers.
- Monitor any separate FEMA notification amending the relevant regulations and update compliance accordingly.
Who it affects
Authorised Dealer Category-I banks, Companies in mining, exploration, and refining sectors, Corporate borrowers seeking ECB for infrastructure projects
Which sectors are now included in the infrastructure definition for ECB?
The expanded definition includes power, telecom, railways, roads (including bridges), sea ports and airports, industrial parks, urban infrastructure (water supply, sanitation, sewage), and now mining, exploration, and refining.
Does this circular change any other ECB conditions like the borrowing limit or maturity?
No. All other ECB policy aspects—such as the USD 500 million per borrower per financial year automatic route limit, eligible borrower criteria, end-use norms, and average maturity period—remain unchanged.
When does this expanded definition take effect?
The expanded definition is effective immediately from the date of the circular, i.e., October 8, 2008.