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External commercial borrowings (ecb)

ACS Parul Rawat (Entrepreneur | Corporate Law Advisor | Lawyer in Making | AIR-8) (218 Points)

06 May 2017

What is the meaning of Minimum Average Maturity Period under ECB? For Example: Minimum Average Maturity Period of ECB is 3 years. Does it mean that the ECB should be paid off in Minimum 3 Years or does it mean that the payment will be scheduled after 3 years?

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An external commercial borrowing in India to facilitate the access to foreign money by Indian ... For infrastructure and greenfield projects, funding up to 50% ( through ECB) is allowed. According to a report in The Hindu in January 2013, the ...

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Ajit Hegde (CA - Final) (1367 Points)
Replied 07 May 2017

3 years period is set for capital goods. That is the maximum allowed under ECB. In some cases rollover for further 2 years will be done with the specific permission of RBI.

3 years is the period until which the original term loan will be on hold. after the expiry of which it will be debited. Principal payment need not be made untill 3 years