Ecb loans for working capital

Hi Sriram,

As per RBI/2011-12/ 9 Master Circular No.9 /2011-12 :

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/09MCEC300611.pdf

It has been clearly mentioned under ECB of part 1 ( End uses not permitted )

(c) For working capital, general corporate purpose and repayment of existing Rupee loans not permitted.

In your case we would consider the reimbursement of expenditure incurred on new project as "Repayment of existing rupee loans" - hence not permitted.

My view - But since the expenditure is on New project of the company and expended from the company - reimbursement of such amount would not be considered as a serious contravention and can be supported with reasonable explanation.

For further information you can go through the above master circular.

Due to lack of information I am unable to comment further.

Thank you.

Dear Sriram

ECB can be utilise for the purpose as mentioned in sanction letter provided by the bank.

And the company incurred some amount for taking ECB Disbursement / drawdown and other

type of expenses which incurred during the time when company started processsing of loan and upto

disbursement of loan are eligible for reimbursement.

Thanks

Yogesh Chaturvedi

Thank you for your valuable suggestion sir's.

Thanks,

Sriram.