Earlier, the Reserve Bank of India had enhanced the limit for prepayment of External Commercial Borrowings (ECB) under the ECB Policy to USD 400 million from the earlier limit of USD 300 million. Prepayment of ECBs was permitted without prior approval of the RBI, subject to compliance with the minimum average maturity period as applicable to the loan.
In order to afford greater flexibility to corporates in managing their liquidity and interest costs, the RBI has on 26th September 2007, further enhanced the extant limit for prepayment of ECBs. Accordingly, it has now been decided to permit prepayment of ECBs up to USD 500 million as against the earlier limit of USD 400 million, without prior RBI approval and subject to compliance with the minimum average maturity period as applicable to the loan.
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