ECB Compliance
Raise External Commercial Borrowings from foreign lenders — RBI ECB Framework compliance, Form ECB registration, periodic ECB-2 reporting, end-use monitoring and FEMA compounding if required.
Raising funds through ECB?
Share the loan amount and lender details. We handle RBI registration, loan agreements and periodic ECB-2 reporting.
Talk to a CS →A complete ecb compliance package
ECB Framework Assessment
Identification of the applicable ECB track (Automatic or Approval Route), eligible borrower and lender, end-use and cost compliance.
Loan Agreement Review
Review and structuring of ECB loan agreement — interest rate compliance with all-in-cost ceiling, security and repayment.
Form ECB Registration
Form ECB filed with RBI (through Authorised Dealer Bank) within 7 working days of drawdown or signing — as applicable.
ECB-2 Monthly Reporting
Monthly ECB-2 return filed with RBI through the AD bank — covering drawdowns, repayments and interest payments.
End-Use Monitoring
Monitoring of end-use compliance — ECB proceeds cannot be used for restricted purposes (real estate, equity investment, etc.).
FEMA Compounding (if needed)
Where ECB violations have occurred, we handle RBI compounding application to regularise the position.
What is needed for ecb compliance
Eligible Borrower & Lender
The Indian borrower and foreign lender must qualify as eligible entities under the RBI ECB framework.
All-In-Cost Ceiling
Interest and fees cannot exceed the all-in-cost ceiling prescribed by RBI — benchmark rate plus maximum spread.
Minimum Average Maturity
ECBs must meet the minimum average maturity period (3 years for most tracks) — prepayment restrictions apply.
Form ECB Within 7 Working Days
Form ECB must be filed with RBI through the AD bank within 7 working days of the ECB agreement signing (for loan registration).
Monthly ECB-2 Return
ECB-2 must be filed monthly with RBI through the AD bank — covers all transactions during the month.
Restricted End Uses
ECB proceeds cannot be used for equity investment, real estate, working capital (for some tracks) or repayment of rupee loans.
End-use violations are the most common and most serious ECB non-compliance. Using ECB proceeds for real estate, equity investment or on-lending violates the RBI framework and requires compounding. We set up an end-use tracking system from the first drawdown to ensure every rupee is used correctly.
Common issues with ecb compliance
Simple steps, no surprises
ECB framework assessed
Track, eligible borrower, lender, all-in-cost and end-use eligibility confirmed before signing.
Loan agreement signed and ECB registered
Loan agreement reviewed — Form ECB filed with RBI through AD bank within 7 working days.
Drawdown and ECB-2 reporting
Funds drawn down — monthly ECB-2 return filed from the first month of drawdown.
Ongoing monitoring and repayment
End-use tracked, interest payments monitored, ECB-2 filed monthly — full repayment recorded.
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Frequently asked questions
An ECB is a loan raised by an Indian entity from a foreign lender — including foreign banks, export credit agencies, foreign equity holders and international capital markets. ECBs are regulated by RBI under the FEMA (Borrowing and Lending) Regulations 2018.
The RBI ECB framework has two main tracks: (1) the Foreign Currency ECB (FCY ECB) — loans denominated in foreign currency, and (2) the Indian Rupee ECB (INR ECB) — loans denominated in rupees from foreign lenders. Each track has different eligible borrowers, lenders, end-use restrictions and cost ceilings.
Form ECB is the registration form filed with RBI through the borrower's Authorised Dealer (AD) bank. It must be filed within 7 working days of the signing of the loan agreement — or before the first drawdown (for revolving facilities). RBI assigns a Loan Registration Number (LRN) which is used for all future reporting.
ECB-2 is the monthly reporting return filed with RBI through the AD bank. It covers all transactions during the month — including drawdowns, repayments, interest payments and any changes in ECB terms. It must be filed by the 7th of the following month.
ECB proceeds cannot be used for: investment in equity or real estate (residential), on-lending to other entities, repayment of existing Rupee loans (for most tracks) or working capital (for some tracks). End-use violations are the most serious category of ECB non-compliance under FEMA.
Raising funds through ECB from a foreign lender?
We handle Form ECB registration, monthly ECB-2 returns, end-use monitoring and FEMA compounding.