What changed
The maximum permissible ECB for an individual company under the scheme was raised from 50% of average annual export earnings over three years to 75% of that average or 50% of the highest single-year earnings in the same period, whichever is higher. For SPVs lacking a three-year track record, the limit is now 50% of the most recent financial year's export earnings. A new overall cap of USD 3 billion per company or group was introduced.
What it means for you
Banks can now facilitate larger ECB inflows for clients looking to repay rupee loans or fund fresh capex, as the borrowing headroom has increased. The new group-level cap of USD 3 billion prevents excessive concentration of external borrowing. SPVs, often used in infrastructure and project finance, get a clearer path to access ECB even without a long earnings history.
What you must do
- Update internal ECB policy and loan processing systems to reflect the new 75% / 50% calculation method.
- Advise corporate clients, especially exporters and SPVs, about the enhanced borrowing limits under the scheme.
- Ensure that any ECB sanctioned under this scheme does not cause the borrower or group to exceed the USD 3 billion aggregate cap.
- Verify that SPV borrowers have completed at least one year from incorporation before applying the relaxed track record provision.
Who it affects
Category-I Authorised Dealer Banks, Export-oriented companies seeking ECB for rupee loan repayment or capex, Special Purpose Vehicles (SPVs) with limited operational history, Corporate groups planning large-scale external commercial borrowings
How is the new ECB limit calculated for a company with three years of export earnings?
The limit is the higher of 75% of the average foreign exchange earnings over the past three financial years, or 50% of the highest earnings in any of those three years.
What is the maximum ECB a group can raise under this scheme?
The total ECB availed by an individual company or a group as a whole under this scheme cannot exceed USD 3 billion.
Can a newly formed SPV with less than three years of operations avail ECB under this scheme?
Yes, if the SPV has completed at least one year from incorporation, it can borrow up to 50% of its export earnings from the most recent financial year.