RBI provides relief to ECB borrowers

RBI has recently stated that the unutilised External Commercial Borrowing (ECB) proceeds drawn down before March 1, 2020, can be parked in term deposits with banks in India prospectively up to March 1, 2022, in a relief to borrowers who could not utilise the proceeds due to lockdown. Under the extant ECB framework, borrowers are allowed to place ECB proceeds in term deposits with banks in India for a maximum period of 12 months.

RBI, in its statement on developmental and regulatory policies, said, “In view of the difficulty faced by borrowers in utilising already drawn down ECBs due to COVID-19 pandemic induced lockdown and restrictions, it has been decided to relax the above stipulation as a one-time measure, with a view to provide relief.”