Circular No.ES/150 / 2016-17 October 21, 2016
To: Members of the Council
Sub:. External Commercial Borrowings (ECB) – Extension and conversion
Dear Member,
This is to inform you that the Reserve Bank of India (RBI) has issued Circular No. RBI/2016-17/92 dated 20.10.2016 regarding the extension and conversion of External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers.
In this connection, if the ECB borrower concerned has availed credit facilities from the Indian banking system including overseas branches/subsidiaries, any extension of tenure / conversion of unpaid ECBs into equity (whether matured or not) shall be subject to applicable prudential guidelines issued by the Department of Banking Regulation of RBI, including guidelines on restructuring. Further, such conversion into equity shall also be subject to consent of other lenders, if any, to the same borrower or at least information regarding conversions shall be exchanged with other lenders of the borrower.
Members may kindly make note of the above.
Thanking you,
V.ANIL KUMAR
EXECUTIVE DIRECTOR
