What changed
Previously, ECBs from indirect equity holders, group companies, and for general corporate purpose required RBI approval. Now, AD banks can approve these under the automatic route for manufacturing, infrastructure, hotels, hospitals, and software sectors. Also, lender changes for FEH-linked ECBs can be approved by AD banks.
What it means for you
Banks can now process more ECB applications without waiting for RBI nod, speeding up approvals for borrowers in eligible sectors. This simplifies compliance for lenders and reduces turnaround time for clients, but banks must ensure all other ECB norms (end-use, all-in-cost, etc.) remain unchanged.
What you must do
- Update internal ECB approval checklists to include new delegated powers for indirect equity holders, group companies, and general corporate purpose ECBs.
- Train AD bank staff on the expanded automatic route eligibility criteria, especially the list of eligible sectors and excluded services.
- Ensure all other ECB policy conditions (e.g., end-use, maturity, all-in-cost) are verified before approving under the new delegated authority.
- Maintain proper documentation for each approved case, including lender change requests, for audit and regulatory review.
Who it affects
AD Category-I banks, Companies in manufacturing, infrastructure, hotels, hospitals, and software sectors, Companies in miscellaneous services (training, R&D, infrastructure support) — only for ECBs from direct/indirect equity holders and group companies, Foreign equity holders and group companies
Which sectors are eligible for the new automatic route for ECBs from indirect equity holders?
Manufacturing, infrastructure, hotels, hospitals, and software sectors are eligible. For ECBs from direct/indirect equity holders and group companies, miscellaneous services (training, R&D, infrastructure support) are also covered, but trading, logistics, financial, and consultancy services are excluded.