FCCB & ECB Advisory — RBI Master Direction

RBI Master Direction — External Commercial Borrowings, Trade Credits and Structured Obligations (January 16, 2019, as amended) — Para 2.1 (eligible borrowers: all entities eligible to receive FDI; some sectors restricted), Para 2.2 (recognised lenders: foreign equity holders, international banks, multilateral/regional financial institutions, foreign branches of Indian banks, foreign investors per FEMA 20(R)), Para 2.3.3 (negative end-use list: real estate, capital market investment, on-lending, equity investment in India — prohibited), Para 2.4 (minimum average maturity period — MAMP: 3 years for most borrowers; 10 years for ECB for infrastructure sectors), Para 2.5 (all-in-cost ceiling: benchmark rate (SOFR for USD) + 350 bps spread for MAMP up to 5 years; + 500 bps for longer maturity), Para 2.6 (mandatory hedging 70% for infrastructure/core investment companies), LRN (Loan Registration Number) — mandatory before first drawdown — obtained via AD Category-I bank filing Form ECB, Form ECB-2 monthly return to RBI through AD bank within 7 working days of month end; FCCB under the Companies (Issue of Foreign Currency Convertible Bonds and Ordinary Shares through Depositary Receipt Mechanism) Scheme 1993; FCCB conversion pricing per FEMA Pricing Guidelines — Rule 21 of FEMA Non-Debt Instruments Rules 2019 (formerly FEMA 20(R)); FEMA 1999 Section 6(3)(d)

Harun Raaj & Associates provides expert advisory on External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) under the regulatory framework of the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA). Our services cater to Indian corporates, LLPs, and other eligible entities seeking to raise foreign debt or issue convertible instruments.

The ECB framework, governed by the RBI Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations (January 16, 2019, as amended), mandates strict compliance with eligibility criteria, end-use restrictions, all-in-cost ceilings, and minimum average maturity periods (MAMP). FCCBs are governed by the Companies (Issue of Foreign Currency Convertible Bonds and Ordinary Shares through Depositary Receipt Mechanism) Scheme 1993 and FEMA Non-Debt Instruments Rules, 2019.

Our end-to-end advisory covers the entire lifecycle of the borrowing, from initial structuring and LRN registration via the RBI FIRMS Portal to Form ECB filing, monthly Form ECB-2 returns, hedging compliance, and eventual redemption or FCCB conversion. We ensure that your transaction is structured in a tax-efficient and regulatory-compliant manner.

Whether you are raising fresh ECB for capex, refinancing an existing loan, or issuing FCCBs to a foreign investor, our team provides strategic guidance on pricing benchmarks, documentation (LMA-style agreements), and liaisoning with AD Category-I banks, ensuring a seamless process from mandate to maturity.