External Commercial Borrowings (ECB) Framework
– Heta Mehta, Senior Executive | corplaw@vinodkothari.com
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ECBs become Easy: RBI liberalises norms for external commercial borrowings
– Vinita Nair, Joint Managing Partner and Heta Mehta, Senior Executive | corplaw@vinodkothari.com
Updated as on 19th February, 2026
Permits acquisition finance, enhances limits to 3x of net worth, removes cost ceilings, all PROIs become eligible lenders and many more.
RBI significantly relaxed the framework for External Commercial Borrowings (ECBs) effective February 16, 2026, permitting entities to borrow from any person resident outside India (PROI), enhancing the ECB limit from USD 750 mn to higher of USD 1 bn / 300% of net worth, relaxing it for financial sector regulated entities, removing the absolute restrictions on all-in cost, penal interest on all ECBs etc. Necessary amendments have been notified in FEMA (Borrowing and Lending) Regulations, 2018 pursuant to which the RBI Master Directions on ECB also stands modified. ECB norms are now governed by Schedule 1 of these regulations. These measures are expected to further strengthen cross-border fundraising avenues for Indian corporates.
As per RBI data, ECB inflows rose sharply from approximately USD 8 billion in FY 2022–23 to USD 26.5 billion in FY 2023–24, and further to over USD 61 billion in FY 2024–25. In FY 2025–26, around USD 27.6 billion has been mobilised up to December, indicating continued access to offshore funds, though at a moderate pace compared to the previous year’s peak. The present amendment will provide further impetus to entities to avail ECBs.
