What changed
The definition of infrastructure sector for ECB has been broadened from the existing list (power, telecommunication, railways, road including bridges, sea port and airport, industrial parks, urban infrastructure, mining/exploration/refining, cold storage) to a more detailed list covering energy, communication, transport, water/sanitation, mining/exploration/refining, and social/commercial infrastructure. New inclusions like oil/gas storage, telecommunication towers, inland waterways, urban public transport, hospitals, and hotels (with investment thresholds) now qualify for ECB.
What it means for you
Banks can now process ECB applications for a wider range of projects, potentially increasing cross-border borrowing volumes. Lenders must update their internal eligibility checklists and train staff on the expanded sub-sectors. The alignment with the government's master list reduces ambiguity, but banks should verify that borrowers meet all other ECB norms unchanged.
What you must do
- Update internal ECB policy documents to reflect the expanded infrastructure definition.
- Train relationship managers and credit teams on new eligible sub-sectors like city gas, telecom towers, and hotels.
- Review existing ECB applications to ensure they align with the updated list.
- Communicate the changes to corporate clients who may now qualify for ECB.
Who it affects
Category-I Authorised Dealer Banks, Corporate borrowers seeking ECB for infrastructure projects, Project finance teams in banks
Are hotels with investment below Rs. 200 crore eligible?
Only hotels with fixed capital investment of Rs. 200 crore and above, or convention centres with Rs. 300 crore and above, or three-star or higher category classified hotels located outside cities with population of more than 1 million are eligible.
When did this circular take effect?
The instructions came into effect immediately from the date of the circular, September 18, 2013, subject to review based on experience.