- What is all in cost ceiling for ECB?
- Can NBFC raise ECB?
- Can ECB be availed in INR?
- Is hedging mandatory for ECB?
- What is maturity period in ECB?
- What is all in cost in ECB?
- Is ECB allowed in real estate?
- What is difference between FDI and ECB?
- What is minimum average maturity in ECB?
- What is ECB certificate?
- How do I hedge an ECB loan?
- How do I file an ECB return?
- What are ECB guidelines?
- How do I get ECB?
- Can ECB be interest free?
What is all in cost ceiling for ECB?
All-in-cost ceiling The definition of all-in-cost as per the revised ECB framework specifies that various components of the all-in-cost have to be paid by the borrower without taking recourse to the drawdown of ECB/Trade Credit, i.e.
ECB/Trade Credit proceeds cannot be used for payment of interest/charges..
Can NBFC raise ECB?
In a recent development, the RBI issued new guidelines for External Commercial Borrowings (ECB) in NBFC funding. … However, the ECB’s should be raised from eligible lenders except for foreign branches/ overseas subsidiaries of Indian banks.
Can ECB be availed in INR?
Yes, as long as the ECBs are in compliance with the ECB guidelines for the respective currencies as per RBI guidelines. The individual limit will include all ECBs raised, whether in foreign currency or INR.
Is hedging mandatory for ECB?
MUMBAI: The RBI has eased hedging requirement on external commercial borrowings (ECBs). … Earlier, the central bank had reduced the minimum tenure for borrowing through the ECB route to three years from five years. It also increased the tenure for mandatory hedging from five years to 10 years.
What is maturity period in ECB?
Eligible borrowers can now ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes from recognised lenders, except foreign branches or overseas subsidiaries of Indian banks.
What is all in cost in ECB?
An all-in cost consists of each and every cost involved in a financial transaction or business operation. All-in costs can be used to explain the total fees and interest included in a financial transaction, such as with a loan or certificate of deposit (CD), or with a securities trade.
Is ECB allowed in real estate?
The revised regulation does away with the sectoral limits on ECB and, therefore all eligible investors may now raise ECB up to 750 million dollars in a financial year. … From the above, it is clear that real estate brokers are not still not permitted to raise ECBs.
What is difference between FDI and ECB?
ECB means foreign funding which is not in the form of equity. When it is used in the form of equity capital, then it is called Foreign Direct Investment (FDI). … The convertible instruments are covered under the FDI Policy. Any other direct capital is not allowed in ECB.
What is minimum average maturity in ECB?
10 yearsFor repayment of Rupee loans availed domestically for purposes other than capital expenditure and for on-lending by NBFCs for the same, the minimum average maturity period of the ECB is required to be 10 years.
What is ECB certificate?
The European Certification Body (ECB) is a neutral certification body accredited to ISO/IEC 17065. It issues ECB•S certificates for products of the security industry.
How do I hedge an ECB loan?
IRS + Forward contracts: Another way of hedging ECB is to hedge the Libor risk using a simple IRS and hedge the Fx risk on principal and coupon using forward contracts. This also essentially hedges all the risks and completely converts the loan into an INR loan.
How do I file an ECB return?
Borrower may enter into loan agreement complying with the ECB guidelines with recognised lender for raising ECB under Automatic Rout without prior approval of RBI. The Borrower must obtain LRN from the RBI before drawing the ECB. Monthly Return regarding use of ECBs. Form ECB 2 along with Certificate of CA.
What are ECB guidelines?
More recently, RBI issued a guideline stating that all eligible borrowers can raise ECB up to USD 750 million or equivalent per financial year under the automatic route. Borrowers can use 25 per cent of the ECB to repay rupee debt and the remaining 75 per cent should be used for new projects.
How do I get ECB?
Applicants are required to submit an application in form ECB through designated AD bank to the Chief General Manager-in-Charge, Foreign Exchange Department, Reserve Bank of India, Central Office , Central Office , External Commercial Borrowings Division, Mumbai – 400 001, along with necessary documents.
Can ECB be interest free?
Maximum interest that can be paid is Benchmark rate plus 450 bps spread. No minimum interest to be paid is specified. Hence, considering the parent – subsidiary relation, ECB in the form of loan can be interest free.