ECB Regulations revamped by RBI - Effective 9 February 2026

 The Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026, marking a significant overhaul of India’s External Commercial Borrowing (“ECB”) framework.

The amendments introduce a more liberalised, principle-driven regime by expanding borrower and lender eligibility, rationalising maturity norms, enhancing borrowing limits, and simplifying reporting requirements.
The key changes are tabulated below:

Particulars	Existing Framework	Revised Regulations (2026 Amendment)
Eligible Borrowers	Limited categories of entities permitted to raise ECB	Any person resident in India (other than an individual), incorporated under a Central/State Act, is eligible (if permitted under governing regulations). LLPs now expressly recognised as eligible borrowers. Entities under restructuring/CIRP also permitted.
Recognised Lenders	Lenders required to satisfy FATF/IOSCO jurisdiction criteria	Broader formulation: “person resident outside India”, overseas branch of RBI-regulated lender, or financial institution / its branch in IFSC. FATF/IOSCO condition no longer expressly applicable.
End-Use Restrictions	Extensive negative list including real estate, agriculture, etc.	End-use restrictions rationalised. Certain sectors such as real estate, agriculture and plantation now permitted subject to conditions. Acquisition finance now permitted.
Borrowing Limits	ECB cap of USD 750 million per financial year (with variations)	Borrowing permitted up to the higher of: (i) USD 1 billion outstanding ECB; or (ii) 300% of net worth (external + domestic borrowings). No limits for eligible borrowers regulated by financial sector regulators.
Minimum Average Maturity (MAMP)	Differentiated maturity requirements depending on category	Uniform MAMP of 3 years. Manufacturing sector may avail ECB with MAMP between 1–3 years. MAMP exempted for specified transactions (conversion, refinancing, corporate actions, waiver, etc.).
Cost of Borrowing	All-in-cost ceiling prescribed	All-in-cost ceiling removed. Cost to align with prevailing market conditions and arm’s length principles (especially for related-party borrowings).
Security creation	AD Bank NOC required for creation of security / charge on assets for ECB	This requirement has been done away with and no NOC is required.
Reporting Requirements	Monthly Form ECB-2 reporting required	Monthly reporting discontinued. Reporting required only in the month of receipt of proceeds and debt servicing. Provision for late submission fee introduced.

Effective Date: The Amendment Regulations were notified on 9 February 2026 and have come into force upon publication in the Official Gazette

The amendments signal a decisive shift toward a more flexible and market-aligned ECB regime. By widening the scope of eligible borrowers and lenders, enhancing borrowing limits, removing the all-in-cost ceiling, and reducing compliance burden through simplified reporting, the RBI has moved toward a liberalised and commercially responsive cross-border borrowing framework