The Reserve Bank of India (RBI) has proposed a major overhaul of the External Commercial Borrowing (ECB) framework, signalling a decisive shift toward liberalising India’s access to global capital. Announced as part of the Development and Regulatory Policies Statement during the 57th Monetary Policy Committee meeting on October 1, the draft released on October 3 seeks to realign the ECB regime under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 with evolving corporate financing realities.

The current ECB regime is characterised by strict limits and conditions. Under the automatic route, corporates can raise up to $750 million, with an all-in-cost ceiling of benchmark plus 500 to 550 bps for foreign currency loans and benchmark plus 450 bps for rupee borrowings.

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