I had one query. Based on the latest rules, is there any RBI-mandated restriction on prepayment of the ECBs by an Indian borrower using their own funds?
In terms of Para 7 of the ECB Master Directions, the designated AD Category I banks can approve any requests from the borrowers for changes in respect of ECB duly ensuring that the changed conditions, comply with extant ECB norms and are with the consent of the lender(s). Accordingly, compliance with MAMP norms to be ensured. Further the pre-payment charge should not be more than 2 per cent over and above the contracted rate of interest on the outstanding principal amount and will be outside the all-in-cost ceiling.
Thereafter, the modified terms to be reported in Form ECB 2.
I have two questions with respect to the liquidation of the issuer. In the event of a liquidation, who gets the preference? Is it the foreign lender of dollar denominated debt or the domestic lender of rupee denominated debt? Secondly, if both the foreign lender and domestic lender have first rank pari passu charge on the security (immovable or movable asset), then who gets the preference – domestic lender or foreign lender?
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I had one query. Based on the latest rules, is there any RBI-mandated restriction on prepayment of the ECBs by an Indian borrower using their own funds?
In terms of Para 7 of the ECB Master Directions, the designated AD Category I banks can approve any requests from the borrowers for changes in respect of ECB duly ensuring that the changed conditions, comply with extant ECB norms and are with the consent of the lender(s). Accordingly, compliance with MAMP norms to be ensured. Further the pre-payment charge should not be more than 2 per cent over and above the contracted rate of interest on the outstanding principal amount and will be outside the all-in-cost ceiling.
Thereafter, the modified terms to be reported in Form ECB 2.
I have two questions with respect to the liquidation of the issuer. In the event of a liquidation, who gets the preference? Is it the foreign lender of dollar denominated debt or the domestic lender of rupee denominated debt? Secondly, if both the foreign lender and domestic lender have first rank pari passu charge on the security (immovable or movable asset), then who gets the preference – domestic lender or foreign lender?