Areas of recent growth:
The salient features of the new ECB framework are as follows:
- ECBs are now categorised under two broad heads, “Foreign Currency denominated ECB” and “Rupee Denominated ECB”;
- The eligibility criteria for an organization to be able to avail ECB has now been expanded to include all entities eligible to receive Foreign Direct Investment (FDI). Additionally, Port Trusts, Units in Special Economic Zones, SIDBI, EXIM Bank, registered entities engaged in micro-finance activities, viz., registered not for profit companies, registered societies/trusts/cooperatives and non-government organisations can also borrow under this framework. Thus, a society or a trust registered in India and owning a ship can now avail ECB from a foreign lender.
- Similarly, the category of persons which can lend has also been widened. Multilateral and regional financial institutions, individuals and foreign branches / subsidiaries of Indian banks can also be lenders. The criteria for qualifying as a lender is that a person should be resident of Financial Action Task Force (FATF) or International Organization of Securities Commission (IOSCO) compliant country.