ECB end use

We have been sanctioned ECB for our upcoming steel projects, since there was a delay for the debt finance, promoters have bought the intial capital expenditue more than there ratio, now we are going to draw down ECB, Whether ECB can be utilised for the payment of the excess contribution bought by the promoters? please specify with respect to ECB guidelines.

Replies (5)

ECB cannot use for the following purpose

END-USE REQUIREMENTS

.(A) External commercial loans are to be utilised for import of capital goods and services (on FOB or CIF basis) and for project reletated expenditure in all sectors subject to following conditions :
(a) ECB raised for project-related rupee expenditure must be brought into the country immediately.
(b) ECB raised for import of capital goods and services should be utilised at the earliest and corporates should strictly comply with RBI's extant guidelines on parking ECBs outside till actual imports. RBI would be monitoring ECB proceeds parked outside.
(c) ECB raised is not permitted for investment in stock market or in real estate.

C) Under no circumstances, ECB proceeds will be utilised for -
( i) Investment in stock market; and
(ii) Speculation in real estate.

GO TO RBI SITE READ ECB  GUIDELINES

 

https://www.rbi.org.in/scriptts/BS_ViewMasCirculardetails.aspx?id=5786

Dear Valji,

 

Thanks for reply. But it is stil not clear whether we can repay the additional amount brought in by promoters pending disbursement from Banks.Pl. give your comment as the same is not specifically given in Non-permitted list also. Pl. advice.

ECB amt use only for the purpose buiness expansion & purchase of capital purpose only

no other purpose

you have to submit ECB return  for what purpose money is utilised

you cannot pay director loan ,please check ECB checklist

 

Thaks a lot Sir.....!

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 November 2026
Article Assisstant

DPV & Associates

Chennai

CA Inter

View Details
Company
ARTICLESHIP 22 October 2026
Articleship intern

Srinath Manikanta

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
12 November 2026
Tax Product Specialist

BharatX.ai

Gurgaon

B.Com

View Details
Company
02 November 2026
Audit Executive

SRJP & Co LLP

Kochi

CA Inter

View Details
Company
30 October 2026
Asst Manager Accounts

Goodwin Pumps India Pvt Ltd

Chengalpattu

CA Inter

View Details