Changes in Returns for External Commercial Borrowings (ECB)
Reporting under FEMA, 1999 – Changes in Returns for External Commercial Borrowings (ECB)
Authorised Dealer (AD) Category-I banks are advised to note the provisions of A.P. (DIR Series) Circular No. 16 dated September 30, 2022 and the relevant instructions contained in Part V and Part XIII of the Master Direction on Reporting under the Foreign Exchange Management Act (FEMA), 1999.
Following a review, certain modifications have been introduced regarding the reporting of returns related to External Commercial Borrowings (ECB).
Key Changes
1. Treatment of Form ECB and Revised Form ECB
Form ECB-1 and Revised Form ECB-1 (previously known as Form ECB and Revised Form ECB before the notification of the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026) will now be treated as returns that do not capture transaction flows. Accordingly, the Late Submission Fee (LSF) for delayed filing will be calculated based on this classification.
2. LSF Calculation for Form ECB-2
The Late Submission Fee is calculated per return. Therefore, each delayed Form ECB-2 filed under a specific Loan Registration Number (LRN) will be considered a separate instance when computing the fixed component of the LSF.
3. Submission Timeline by AD Banks
The designated AD Category-I bank must submit the return, duly completed and certified by the eligible borrower, to the Reserve Bank of India (RBI) within seven calendar days from the date it receives the return.
4. Payment of Late Submission Fee
Where applicable, the Late Submission Fee must be paid to the concerned Regional Office of the RBI through NEFT or RTGS. Payment should be made only after the RBI acknowledges receipt of the return through email, which will also contain detailed payment instructions.
5. Monitoring of LSF Payment
In cases where returns are submitted late, the designated AD Category-I bank must ensure that its customers or constituents pay the applicable Late Submission Fee.
Effective Date
These revised directions will come into effect from April 1, 2026.
Communication to Customers
Authorised Dealer banks are requested to inform their customers and relevant constituents about the contents of this circular.
Legal Authority
The instructions have been issued under Sections 10(4), 11(1), and 11(2) of the Foreign Exchange Management Act, 1999, and do not affect the requirement to obtain approvals or permissions under any other applicable law.
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