ECBs – Parking of ECB proceeds

RBI has vide its circular dated 21st November, 2014 clarified that ECB proceeds can be parked for a limited period of 6 months in bank term deposits with AD Category I banks before being utilised for the purpose for which they were brought in as a Loan. This will be subject to complying with some conditions which are as below:

  1. The applicable guidelines on eligible borrower, recognised lender, average maturity period, all-in-cost, permitted end uses, etc. should be complied with.
  2. No charge in any form should be created on such term deposits i.e. to say that the term deposits should be kept unencumbered during their currency.
  3. Such term deposits should be exclusively in the name of the borrower.
  4. Such term deposits can be liquidated as and when required;

The circular is available at this link viz. http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=9346&Mode=0

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