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ECB Proceeds Parking Relaxation Extended to March 2022

Current · Source: Reserve Bank of India · RBI/2021-22/16 · issued 07 Apr 2021 · ~1 min read
Quick answerRBI allows ECB borrowers to park unutilised proceeds drawn down on or before March 1, 2020, in term deposits with AD Category-I banks for an additional period up to March 1, 2022, as a one-time Covid relief measure.
The rule, in the simplest words
How it plays out — a real example

Ravi, a forex & trade-finance officer in Mumbai, gets a call from a client who borrowed foreign money (ECB) in February 2020 but hasn't used all of it. Ravi checks the drawdown date, sees it's before March 1, 2020, and tells the client they can now keep the unused funds in a fixed deposit until March 1, 2022, instead of the usual 12-month limit. He updates his bank's system to track this new deadline and sends a friendly reminder to all ECB borrowers about the relaxation.

What changed

Previously, ECB proceeds could be parked in term deposits for a maximum of 12 months cumulatively. Now, as a one-time relaxation, unutilised proceeds drawn down on or before March 1, 2020, can be parked for an extended period until March 1, 2022.

What it means for you

This gives ECB borrowers more flexibility to manage idle funds during the pandemic without breaching the earlier 12-month limit. Banks must update their internal systems and advise clients to ensure compliance with the revised parking timeline.

What you must do

Who it affects

AD Category-I banks, ECB borrowers with unutilised proceeds drawn down on or before March 1, 2020

❓ Common questions

What is the maximum period for parking ECB proceeds under this relaxation?

Unutilised ECB proceeds drawn down on or before March 1, 2020, can be parked in term deposits until March 1, 2022, as a one-time measure.

Does this relaxation apply to all ECB proceeds?

No, it applies only to unutilised proceeds drawn down on or before March 1, 2020. Other ECB policy provisions remain unchanged.

📜 Read the original circular — full text as issued by RBI
RBI/2021-22/16 A.P. (DIR Series) Circular No. 01 April 07, 2021 To All Category-I Authorised Dealer Banks Madam / Sir, External Commercial Borrowings (ECB) Policy – Relaxation in the period of parking of unutilised ECB proceeds in term deposits Please refer to paragraph 12 of the Governor’s Statement on Developmental and Regulatory Policies dated April 07, 2021 . In this connection, attention of Authorized Dealer Category-I (AD Category-I) banks is invited to paragraph 4.2 of the of Master Direction No.5 dated March 26, 2019 , on “External Commercial Borrowings, Trade Credits and Structured Obligations”, in terms of which ECB borrowers are allowed to park ECB proceeds in term deposits with AD Category-I banks in India for a maximum period of 12 months cumulatively. 2. Based on requests from stakeholders, including Industry associations, and with a view to providing relief to the ECB borrowers affected by the Covid-19 pandemic, it has been decided to relax the above stipulation as a one-time measure. Accordingly, unutilised ECB proceeds drawn down on or before March 01, 2020 can be parked in term deposits with AD Category-I banks in India prospectively for an additional period up to March 01, 2022. 3. All other provisions of the ECB policy remain unchanged. AD Category-I banks should bring the contents of this circular to the notice of their constituents/ customers. 4. The aforesaid Master Direction No. 5 dated March 26, 2019 , is being updated to reflect the changes. 5. The directions contained in this circular have been issued under section 10(4) and 11(2) 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 Ajay Kumar Misra Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/16 · issued 07 Apr 2021. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal ECB monitoring systems to reflect the extended parking deadline of March 1, 2022.
📜 Compliance
  • Notify all ECB borrower clients about the one-time relaxation and its eligibility conditions.
  • Verify that the unutilised proceeds were drawn down on or before March 1, 2020, before allowing extended parking.
  • Ensure all other ECB policy provisions remain unchanged and are communicated to customers.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (AD Category-I banks, ECB borrowers with unutilised proceeds drawn down on or before March 1, 2020), your first concrete step on “ECB Proceeds Parking Relaxation Extended to March 2022” is: “Update internal ECB monitoring systems to reflect the extended parking deadline of March 1, 2022.” (RBI issued this 07 Apr 2021).

  1. Circular: RBI/2021-22/16 -- ECB Proceeds Parking Relaxation Extended to March 2022
  2. Issued: 07 Apr 2021
  3. Action required: Update internal ECB monitoring systems to reflect the extended parking deadline of March 1, 2022.
  4. Action required: Notify all ECB borrower clients about the one-time relaxation and its eligibility conditions.
  5. Action required: Verify that the unutilised proceeds were drawn down on or before March 1, 2020, before allowing extended parking.
  6. Action required: Ensure all other ECB policy provisions remain unchanged and are communicated to customers.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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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=12070&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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