ECB Regulations 2026: RBI Removes All-in-Cost Cap, Eases Norms
Why in the news
RBI liberalised External Commercial Borrowing (loans from foreign lenders, often for infrastructure, capex and expansion) to widen access to global finance.
Main changes
| Area | Change |
|---|---|
| Participants | More borrowers and recognised lenders |
| Cost | All-in-cost cap gone; AD banks skip market-alignment checks |
| Maturity | Revised minimum average maturity; refinancing clarity |
| End-use | Acquiring control and buying land or property (restricted) permitted |
| On-lending | Regulated entities may lend to individuals; no real estate business |
| AD banks | Current account condition for designated status dropped |
| Reporting | Simpler timelines |
| Instruments | Clarity on FVCIs, convertibles, short-term manufacturing borrowing |
Exam angle
- Aim: simpler rules, better ease of doing business, cost aligned to the market.
- Governed under FEMA.