What is ECB?
External Commercial Borrowings (ECB) refer to commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit, securitized instruments (e.g. floating rate notes and fixed rate bonds) availed of from non-resident lenders with minimum average maturity of 3 years.
Regulations for remittance of ECB principal/interest
The designated Authorised Dealer bank has the general permission to make remittances of instalments of principal, interest and other charges in conformity with ECB guidelines, issued by Government / Reserve Bank of India from time to time.
Documents required for remittance of ECB principal / interest
TT cum A2 application form
Invoice / Debit Note raised by the overseas party
RBI acknowledgment copy of submission of ECB 2 return for the last month.
15 CA & 15 CB (Require for Interest payment only)
Note: ECB principal repayment & interest payment should be done as per details provided in Form 83 & approved by RBI
Besides WHT has to be paid on the interest amount. It can be deducted by the bank by debit to their client a/c or else be paid by the customer directly depending upon the agreement with bank. The rate is however subject to the DTAA agreement with the funding country of the bank branch.
ReplyDeletePankaj Chandak
let me know whether an ECB loan can be repaid from a Rupee Loan? Whether this will support extant RBI/FEMA guidelines?
ReplyDelete