Current · Source: Reserve Bank of India · RBI/2012-13/240 · issued 09 Oct 2012 · ~1 min read
Quick answerRBI has decided to keep the all-in-cost ceiling for External Commercial Borrowings (ECB) unchanged from the levels set in March 2012. This means no change in the maximum interest rate and fees that Indian borrowers can pay on foreign loans until further notice.
The rule, in the simplest words
The limit on how much interest and fees you can charge for foreign loans (the all‑in‑cost ceiling) stays exactly the same as it was set in March 2012.
Because the ceiling hasn’t changed, banks and companies can keep borrowing overseas at the same cost limits as before.
There are no new rules or higher limits yet – just keep using the old March 2012 ceiling for every new foreign loan.
Always double‑check that any new foreign‑loan proposal stays within this unchanged ceiling.
Watch for future RBI circulars that might change the ceiling again.
How it plays out — a real example
Sanjay, a corporate finance officer at a Mumbai bank, is helping a client raise a $50 million loan from a U.S. bank. He checks that the total cost (interest plus fees) does not exceed the March 2012 ceiling and tells the client that the rates are still the same as before, giving them confidence to proceed.
What changed
RBI reviewed the all-in-cost ceiling for ECB and decided to maintain the existing limits specified in the March 2012 circular. No revision was made to the ceiling. All other ECB policy parameters remain the same.
What it means for you
Banks and their corporate clients can continue to borrow overseas at the same cost limits as before. This provides stability and predictability for ECB pricing. Lenders should ensure that any new ECB proposals comply with the unchanged all-in-cost ceiling.
What you must do
Continue to apply the all-in-cost ceiling as per A.P. (DIR Series) Circular No. 99 dated March 30, 2012 for all new ECB proposals.
Inform your corporate customers that the ECB cost ceiling remains unchanged until further review.
Monitor any future RBI circulars for potential revisions to the all-in-cost ceiling.
Who it affects
All Category-I Authorised Dealer Banks, Indian corporates raising ECB, Borrowers and lenders in the ECB market
❓ Common questions
What is the all-in-cost ceiling for ECB as per this circular?
The circular does not specify the exact ceiling figure; it only states that the ceiling set in the March 2012 circular continues to apply. You must refer to that earlier circular for the specific rate.
Does this circular change any other ECB rules?
No. All other aspects of ECB policy remain unchanged. Only the all-in-cost ceiling was reviewed and kept the same.
Who should we inform about this circular?
AD Category-I banks are required to bring the contents to the notice of their constituents and customers who are involved in ECB.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/240
A.P. (DIR Series) Circular No. 40
October 09, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
External Commercial Borrowings (ECB) Policy – Review of all-in-cost ceiling
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 99 dated March 30, 2012 relating to ECB.
2. It has been decided that the all-in-cost ceiling as specified in A.P. (DIR Series) Circular No. 99 dated March 30, 2012 will continue to be applicable until further review.
3. All other aspects of ECB policy remain unchanged and AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers.
4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/240 · issued 09 Oct 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All Category-I Authorised Dealer Banks, Indian corporates raising ECB, Borrowers and lenders in the ECB market), your first concrete step on “ECB All-in-Cost Ceiling Unchanged – Oct 2012” is: “Continue to apply the all-in-cost ceiling as per A.P. (DIR Series) Circular No. 99 dated March 30, 2012 for all new ECB proposals.” (RBI issued this 09 Oct 2012).
Circular: RBI/2012-13/240 -- ECB All-in-Cost Ceiling Unchanged – Oct 2012
Issued: 09 Oct 2012
Action required: Continue to apply the all-in-cost ceiling as per A.P. (DIR Series) Circular No. 99 dated March 30, 2012 for all new ECB proposals.
Action required: Inform your corporate customers that the ECB cost ceiling remains unchanged until further review.
Action required: Monitor any future RBI circulars for potential revisions to the all-in-cost ceiling.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7611&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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