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ECB for Real Estate: RBI Draft Opens Door to Offshore Loans

7 October 20251 min read
BANKING & FINANCEECB for RealEstate: RBI DraftOpens Door toOffshore Loans7 October 2025safalsetu.com

Why in the news

RBI has long avoided property ECBs because of the 1997 Asian crisis, but its draft policy now signals a shift to attract dollars.

Key facts

PointExistingDraft
ProjectsLarge ones onlyAny FDI-approved project
LenderMust follow FATF or IOSCOAny non-resident person
  • Not allowed: real estate business and farmhouses.
  • ECBs may fund land purchase, reducing reliance on JDAs.
  • LLPs can borrow from NRI partners.

Reasons

  • More dollar supply amid FPI selling and tariffs.
  • RERA and REITs improved transparency.
  • Large corporates entering property.

Exam angle

  • ECB = external commercial borrowing; reforms: RERA, REITs.

Test yourself

1. RBI's draft ECB policy proposes that ECBs be allowed for which category of real estate projects?

The notes say all FDI-eligible real estate projects can access ECBs.

2. Which crisis shaped RBI's earlier reluctance to permit ECBs in real estate?

Foreign-currency property debt caused damage in 1997 Asian crisis countries.

3. Under the draft, who can be a recognised ECB lender?

The draft opens lending to any person resident outside India.

This topic is part of Daily Current Affairs 5 & 6 October 2025 (15 topics).

All topics of the dayDay quizOctober 2025

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