(i) Proposals from corporates/institutions for raising external commercial borrowings (ECBs) will be considered under the following schemes:

(a) USD 5 million Scheme :- Raising of ECB under the scheme will be considered provided


(a) the amount to be raised does not exceed USD 5 million or its equivalent and

(b) the borrowing should be for a minimum simple maturity of three years. Corporates/institutions may utilise the proceeds of such borrowings for their business related expenditure (including rupee expenditure) subject to the caveat that only one such loan should be outstanding at any point of time.

(b) USD 10 million Scheme :- Raising of ECBs under this scheme will be considered provided


(a) the amount to be raised does not exceed USD 10 million or its equivalent and

(b) the minimum average maturity of the loan should be of three years under various windows i.e. Exporters/Foreign Exchange Earners Scheme, Infrastructure Project Scheme, Long Term Borrowers Scheme and others. The proceeds of the ECB raised under the scheme may be utilised for the purpose for which it has been sanctioned.

Applications for raising ECB under USD 5 million Scheme or under USD 10 million Scheme should be submitted in form ECB 6 through an authorised dealer to the Chief General manager, Exchange Control Department, ECB Division, Central Office, Reserve Bank of India, Mumbai,400 001.

(ii) In approved cases, Reserve Bank will issue a letter of approval indicating the terms and conditions of the proposed loan and allot a loan key number. On receipt of Reserve Banks approval, the borrower firm/company may conclude the loan agreement with the overseas lender taking care to ensure that no condition or financial liability, direct or indirect, other than that specifically approved by Reserve Bank is accepted in terms of the said loan agreement. The borrower, after concluding the loan agreement, should file a certified true copy thereof with the concerned Regional Office of Reserve Bank. Reserve Bank will take the agreement on record, allot a registration number for the proposed foreign currency loan and advise the borrower accordingly if the agreement is found to be in conformity with approved terms. The borrower should draw the foreign currency loan amount for utilisation towards approved purpose(s) only after the loan agreement has been taken on record by Reserve Bank. The Registration Number should be quoted on all returns/statements including form A2 to be submitted to Reserve Bank.

(iii) As regards drawal of foreign currency loan, utilisation and repayments there against, the borrowers should follow the instructions contained in paragraphs 7B.6 and 7B.7.