A foreign equity holder holding minimum 25% direct equity holding in the borrowing entity or minimum indirect equity holding of 51% in the borrowing entity is a recognised lender. Can the foreign equity holder dispose-off the holding once ECB is contracted?

Recognised lender status requires maintaining minimum equity throughout the ECB tenure; post-contractual divestment can breach eligibility.

A foreign equity holder qualifies as a recognised lender only if it maintains the prescribed minimum equity holding thresholds in the borrowing entity for the entire tenure of the ECB; the minimum direct or indirect ownership conditions must be satisfied continuously and not only at contracting.