External Commercial Borrowing

External Funding

Access to funds is one of the biggest challenges to any business be it for expansion, working capital needs or for settling existing Debt.  External Commercial Borrowing (ECB) is one of the avenues sought by the Indian businesses to raise funds from lenders outside India.

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ECBs are regulated by the Foreign Exchange Management Act, 1999 (FEMA).  The borrowers and lenders have to scrupulously comply with several regulations mandated by FEMA. Non-compliance will be viewed very seriously as mentioned by Reserve Bank of India in its extant circulars. 

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ECB can be raised in INR or foreign currency.  Moreover, Indian company can also raise through Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Exchangeable Bonds (FCEBs) routes from lenders outside India. 

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The ECB framework also provides regulations for trade credits which the businesses have to adhere to.  ECB can be raised under automatic route or approval route.

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PnP Consulting offer a wide range of services for clients willing to raise ECB:

• Advisory services on eligibility criteria of borrowers and lenders.

• Advising on the structure and nature of instruments of the ECB

• Advisory services pertaining to ongoing compliance of ECB.

• Assist companies raise ECB with help of our associates.

• Advising the benchmark rates and risk profiling.

• Handholding services for on-going reporting of ECB.