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Last updated: 2 October 2026
The borrowing cap moved from a flat USD 750 million to the higher of USD 1 billion or 300% of net worth, all-in-cost ceilings are gone, and the eligible lender base has widened — but the registration and reporting discipline underneath it hasn’t gotten any lighter. Our team structures your ECB to the current framework.
Any loan raised by an eligible Indian entity from a recognised lender outside India — a foreign parent, an overseas bank, a private lender — falls under RBI’s External Commercial Borrowings framework, governed by the Foreign Exchange Management (Borrowing and Lending) Regulations. RBI liberalised the framework substantially effective 16 February 2026: the annual borrowing cap moved from a flat USD 750 million to the higher of USD 1 billion outstanding or 300% of the borrower’s net worth, prescriptive all-in-cost ceilings were removed in favour of Authorised Dealer bank oversight, and the eligible lender base was widened to any person resident outside India.
None of that removes the compliance layer underneath. Every ECB still needs a Loan Registration Number before drawdown, minimum average maturity thresholds still apply, end-use restrictions still gate what the money can be spent on, and ECB-2 reporting still tracks every drawdown and repayment. This page is for companies raising or servicing a foreign currency loan who need the borrowing structured, registered, and reported correctly under the current rules. Our team reviews the lender, the loan terms, and the intended end-use before the loan agreement is signed.
Revised annual borrowing limit, replacing the earlier flat USD 750 million cap
Effective date of RBI's liberalised Borrowing and Lending Regulations
Every ECB needs a Loan Registration Number from RBI before the first drawdown
Pricing is now market-determined, subject to Authorised Dealer bank oversight rather than a prescribed cap
ECB-2 is filed for months with a drawdown or debt servicing, within 7 calendar days after that month ends; changes in loan terms go in a revised Form ECB
Legal basis, as amended by the 2025–26 liberalisation
RBI returns or queries applications that are incomplete or inconsistent. Here’s what actually causes it.
Loans with a Loan Registration Number obtained before the 2026 Regulations continue under the erstwhile framework for most purposes, except reporting — which follows the new rules regardless of when the loan was registered. Treating an existing loan as fully "old rules" risks missing the reporting changes that apply to it anyway.
Removing the all-in-cost ceiling doesn't remove scrutiny — loans from group entities, related parties, or connected lenders still need to be priced at arm's length, and Authorised Dealer banks are expected to test for that even without a hard number to check against.
Reporting tied to actual drawdowns and debt servicing, rather than a routine monthly submission, means the filing calendar depends on transaction activity — a quiet month doesn't mean nothing is due, and an active one can trigger multiple filings.
Debt raised from a foreign lender with a defined maturity and repayment obligation — the route this page covers, governed by the Borrowing and Lending Regulations.
Equity or convertible instruments issued to a non-resident investor, with no repayment obligation but reported separately via FC-GPR and FC-TRS. See our FEMA Compliance service.
Short-term financing tied directly to the import of goods, distinct from ECB and governed by its own provisions within the same Borrowing and Lending framework.
We confirm the borrower, lender, and loan terms fit the current ECB framework, including the revised borrowing limit.
Loan tenure, pricing, and end-use reviewed against RBI's minimum maturity and permitted-use norms.
Form ECB filed through the Authorised Dealer bank ahead of the first drawdown.
Reporting submitted within the prescribed window from the relevant cash flow.
ECB-2 returns maintained for the life of the loan as drawdowns, repayments, and interest are serviced.
ECB Filed for any prepayment, restructuring, or change in loan terms.
ECB-2 reporting for every drawdown, repayment, and interest payment, within the prescribed window from the cash flow.
Continued compliance with end-use restrictions for as long as loan proceeds are being utilised.
Revised Form ECB filing for any amendment to loan terms, including prepayment or restructuring.
Net worth and borrowing-limit headroom reassessed if the entity plans further ECB drawdowns under the 300%-of-net-worth ceiling.
Our team replies during business hours.
Effective 16 February 2026, eligible borrowers can raise ECBs up to the higher of USD 1 billion outstanding or 300% of the borrower’s net worth as per its last audited balance sheet, replacing the earlier flat annual cap of USD 750 million.
A Loan Registration Number is issued by RBI on filing Form ECB through an Authorised Dealer bank, and it must be obtained before the first drawdown of any external commercial borrowing — no LRN, no legal drawdown.
Yes. The revised framework replaces the prescriptive all-in-cost cap with a market-determined pricing approach, subject to review and oversight by the Authorised Dealer bank rather than a fixed regulatory ceiling.
Loans with a Loan Registration Number obtained before the 2026 Regulations continue to be governed by the erstwhile ECB framework for most terms, but reporting requirements for these loans follow the new rules going forward.
ECB-2 filings are now linked to actual cash flows, drawdowns, and debt servicing rather than a fixed monthly cycle, with a return due only for months in which there is a drawdown or debt servicing, within 7 calendar days after the end of that month.
More in this section: NBFC ROC Compliance · NBFC Scale Based Regulations (SBR) · Payment Aggregator · Payment Aggregator License · PPI License · RBI Compounding of FEMA Contraventions
ACS – Director, Expertvuw Management Pvt Ltd
NBFC and fintech work is handled by Expertvuw’s team. Certificates and audits required by RBI or by law are issued by independent Chartered Accountants or other practising professionals, and representation before RBI or other authorities is made by authorised professionals or advocates.