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?

Foreign Equity Holders Must Maintain 25% Direct or 51% Indirect Equity for ECB Duration per FEMA Guidelines.

A foreign equity holder must maintain a minimum of 25% direct equity or 51% indirect equity in the borrowing entity throughout the entire tenure of an External Commercial Borrowing (ECB). This requirement is not limited to the time of contracting the ECB but must be adhered to for the duration of the borrowing. Disposing of the equity holding before the ECB tenure ends is not permitted according to the ECB guidelines as of June 26, 2023, under FEMA regulations.