TaxTMI 
TaxTMI 
External Commercial Borrowings (ECB) for Non-Government Organisations (NGOs) engaged in micro finance activities under Automatic Route
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....o. 40 April 25, 2005 To All banks authorised to deal in foreign exchange Madam/Sirs, External Commercial Borrowings (ECB) for Non-Government Organisations (NGOs) engaged in micro finance activities under Automatic Route Attention of Authorised Dealers is invited to the announcement in the Union Budget for 2005-06 regarding access to ECB by qualified NGOs engaged in micro finance ac....
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....ctivities would be eligible to avail ECB. Such NGO (i) should have a satisfactory borrowing relationship for at least 3 years with a scheduled commercial bank authorised to deal in foreign exchange and (ii) would require a certificate of due diligence on `fit and proper' status of the board/committee of management of the borrowing entity from the designated Authorised Dealer (AD). 5. Permitted ....
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....lines to the designated AD. The certificate of due diligence should comprise the following (i) that the lender maintains an account with the bank for at least a period of two years, (ii) that the lending entity is organised as per the local law and held in good esteem by the business/local community and (iii) that there is no criminal action pending against it. ii. Individual Lender has to obta....
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....suance of guarantee, choice of security, parking of ECB proceeds, prepayment and refinancing of ECB under the Automatic Route should be complied with. The designated AD has to ensure at the time of draw down that the forex exposure of the borrower is hedged. 9. Reporting Arrangements :Arrangements: Borrowers are required to comply with the reporting arrangements of ECB such as submission of For....