The External Commercial Borrowing (ECB) policy is regularly reviewed by the Government in consultation with Reserve Bank of India (RBI) to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, the external sector and lessons of experience. 

Consequent upon such a review, it has been decided to modify some aspects of the ECB policy as indicated below:

At present, borrowers proposing to avail ECB up to USD 20 million for Rupee expenditure for permissible end-uses require prior approval of the Reserve Bank under the Approval Route. It has been decided that, henceforth,

(i) borrowers in infrastructure sector may avail ECB up to USD 100 million for Rupee expenditure for permissible end-uses under the Approval Route;

(ii) in the case of other borrowers, the existing limit of USD 20 million for Rupee expenditure for permissible end-uses under the Approval Route has been enhanced to USD 50 million. 

The all-in-cost ceilings in respect of ECB are modified as follows:

Average Maturity Period	All-in-Cost ceilings over 6 Months LIBOR
	Existing	Proposed
Three years and up to five years	150 bps	200 bps
More than five years	250 bps	350 bps

The above changes will apply to ECB both under the automatic route and the approval route.

All other aspects of ECB policy such as USD 500 million limit per company per year under the Automatic Route, eligible borrower, recognised lender, end-use of foreign currency expenditure for import of capital goods and overseas investments, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.

The above amendments in ECB policy will come into force on the date of Notification of Regulations / directions issued by the Reserve Bank in this regard under the Foreign Exchange Management Act, 1999.   

FIIs' Investments in Government Securities and Corporate Bonds

At present, FIIs registered with SEBI are permitted to invest in Government Securities and corporate bonds up to USD 3.2 billion and USD 1.5 billion, respectively.  It has been decided in consultation with the Reserve Bank to enhance the limits to USD 5 billion and USD 3 billion, respectively.  SEBI is being advised to take further action in the matter.

External Commercial Borrowing policy changes: higher approval limits for infrastructure and other borrowers and raised all-in-cost ceilings. Modifications to the External Commercial Borrowing framework raise approval route limits for rupee expenditure-with a higher ceiling for infrastructure borrowers and an enhanced ceiling for other borrowers-and increase all in cost ceilings over six month LIBOR for three to five year and over five year maturities. The changes apply to both automatic and approval routes while other ECB conditions remain unchanged. Amendments take effect upon Reserve Bank notification under the Foreign Exchange Management Act. Separately, FII debt investment ceilings for government securities and corporate bonds are increased and SEBI will be advised to act.