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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. CS Chetna Shoor 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. Chetna 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
Window for ECB-2 filing from the relevant cash flow, and for revised Form ECB from the transaction date
Legal basis, as amended by the 2025–26 liberalisation
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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.
CS Chetna Shoor’s team replies within 4 hours on WhatsApp.
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 submissions due within 30 calendar days of the relevant transaction.
Qualified Company Secretary · ICSI Member · Founder, Expertvuw Management Pvt Ltd
Chetna has guided NBFC promoters through RBI’s COR process end to end, with particular focus on structuring the Net Owned Fund and business plan so the application survives first-round RBI scrutiny rather than coming back with a query.