What changed
Previously, only manufacturing and infrastructure companies that were consistent foreign exchange earners could access ECBs under this scheme for rupee loan repayment or fresh capex. Now, hotel sector companies with a total project cost of INR 250 crore or more are also eligible, regardless of their location.
What it means for you
Banks can now process ECB applications from hotel companies meeting the project cost threshold, potentially reducing their domestic loan exposure as these borrowers replace rupee debt with cheaper foreign borrowing. AD banks must verify and certify the project cost at the time of forwarding the application to RBI, adding a due diligence step.
What you must do
- Update internal ECB eligibility checklists to include hotel sector companies with project cost of INR 250 crore or more.
- Ensure AD Category-I branches verify and certify the project cost before forwarding any hotel sector ECB application to RBI.
- Communicate this circular to all concerned constituents and customers in the hotel industry.
- Monitor that all other scheme conditions (e.g., consistent foreign exchange earner status) remain unchanged for these new borrowers.
Who it affects
AD Category-I banks, Hotel companies with project cost of INR 250 crore or more, Manufacturing and infrastructure firms already eligible under the scheme
What is the minimum project cost for a hotel company to be eligible under this ECB scheme?
The hotel company must have a total project cost of INR 250 crore or more, as certified by the AD bank at the time of forwarding the ECB application to RBI.
Does this circular change any other conditions of the USD 10 billion ECB scheme?
No, all other aspects of the scheme remain unchanged. Only the eligibility has been expanded to include the hotel sector.
Are hotel companies located anywhere in India eligible, or only in certain areas?
The circular specifies eligibility 'irrespective of geographical location,' so hotel companies anywhere in India can apply if they meet the project cost threshold.