What changed
Previously, requests for LRN cancellation or end-use changes for ECBs had to be referred to RBI's Foreign Exchange Department. Now, AD Category-I banks can directly handle LRN cancellations (via DSIM) and approve end-use changes for automatic route ECBs, subject to conditions like no drawdown and timely ECB-2 returns.
What it means for you
This delegation speeds up ECB-related approvals for borrowers, reducing RBI's direct involvement in routine cases. Banks must ensure compliance with conditions and continue monitoring end-use. For approval route ECBs, the old referral process remains unchanged.
What you must do
- Update internal ECB processing guidelines to reflect delegated powers for LRN cancellation and end-use changes.
- Train staff on conditions: no drawdown for LRN cancellation, permissible end-use for changes, and timely ECB-2 returns.
- Establish a monitoring mechanism for end-use changes and ensure prompt reporting to DSIM in Form 83.
- Communicate the new procedures to corporate customers dealing with ECBs.
Who it affects
AD Category-I banks, ECB borrowers under automatic route, DSIM (Department of Statistics and Information Management)
Can AD banks approve end-use changes for approval route ECBs?
No, changes for approval route ECBs must still be referred to RBI's Foreign Exchange Department, Central Office.
What conditions must be met for LRN cancellation by AD banks?
No drawdown must have occurred for that LRN, and all monthly ECB-2 returns must have been submitted to DSIM.
Does this circular change the USD 750 million limit under automatic route?
No, the circular explicitly states that all other ECB policy aspects, including the limit, remain unchanged.