RBI has, with a view to providing greater flexibility to the ECB borrowers in structuring draw down of ECB proceeds and utilisation of the same for permitted end uses, reviewed the guidelines vide upon review vide A.P. (DIR Series) Circular No. 39 dated November 21, 2014. The amendments will come into force with immediate effect and are subject to review.

Pending utilisation for permitted end uses, eligible ECB borrowers may be allowed by AD Category-I banks to park ECB proceeds (both under the automatic and approval routes) in term deposits with AD Category- I banks in India;

The facility is subject to the following conditions:

1. ECB proceeds may be deposited for upto a maximum period of six months
2. Mandatory compliance of applicable guidelines on eligible borrower, recognised lender, average maturity period, all-in-cost, permitted end uses, etc.
3. The term deposits should be kept unencumbered during their currency and therefore no charge in any form is allowed to be created.
4. Term deposits should be exclusively in the name of the borrower.
5. Such term deposits can be liquidated as and when required.

Regulation 9 (1) was amended vide Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2014 on April 28, 2014 w.r.e.f. April 01, 2013 to amend the prescribed period of realisation of export proceeds from 12 months to 9 months; however, the period of 12 months from the date of export was allowed to be continued for the Units located in SEZs, Status Holder Exporters, EOUs, Units in EHTPs, STPs & BTPs realize and repatriate full value of goods/software/services to India.

The issue has since been reviewed and vide A.P. (DIR Series) Circular No. 37 dated November 20, 2014, it has been notified by the RBI that henceforth the period of realization and repatriation of export proceeds shall be 9 months from the date of export for all exporters including Units in SEZs, Status Holder Exporters, EOUs, Units in EHTPs, STPs & BTPs until further notice.

However, the provisions in regard to period of realization and repatriation to India of the full exports made to warehouses established outside India remain unchanged.