What changed
This master circular consolidates all prior instructions on External Commercial Borrowings and Trade Credits into a single reference document, superseding individual circulars listed in the appendix. It updates the framework as of June 16, 2014, and will be replaced by a new master circular on July 1, 2014.
What it means for you
Banks and ADs now have a single, authoritative source for ECB and trade credit guidelines, simplifying compliance and reducing the need to track multiple circulars. The circular clarifies automatic and approval routes, including eligible borrowers, lenders, all-in-cost ceilings, and end-use restrictions, which directly impacts how banks process and monitor cross-border borrowing transactions.
What you must do
- Review the consolidated master circular to ensure all ECB and trade credit processing aligns with the updated guidelines.
- Update internal procedures and training materials to reference this master circular as the primary source for ECB and trade credit rules.
- Ensure all reporting requirements (Form ECB, Form TC, etc.) are followed as per the consolidated instructions.
Who it affects
All Authorised Dealer Category-I banks, Authorised banks handling ECB and trade credits, Indian companies accessing external commercial borrowings
What is the minimum average maturity for ECB under this circular?
ECB must have a minimum average maturity of 3 years, as specified in the definition of ECB in the master circular.
Does this circular apply to trade credits for imports?
Yes, Part II of the master circular covers trade credits for imports into India, including amount, maturity, all-in-cost ceilings, and reporting arrangements.
When will this master circular be withdrawn?
This circular will stand withdrawn on July 1, 2014, and be replaced by an updated master circular on the same subject.