ECB Structuring & Reporting
Parent funding to an Indian subsidiary looks simple until FEMA classifies it. Equity is straightforward but permanent; intercompany debt must fit the External Commercial Borrowings framework — eligible borrower, recognised lender, all-in cost ceiling, minimum average maturity, and end-use restrictions — or it is not permitted debt at all. Groups that wire 'shareholder loans' without touching the framework do not have loans; they have contraventions accruing interest of the regulatory kind.
We structure parent and group funding to fit — or advise honestly when it cannot. ECB terms are designed within the framework's tests while preserving the group's commercial intent; the Loan Registration Number is obtained before a rupee draws down, because sequence matters; monthly ECB-2 returns run on calendar for the loan's life; and modifications — rate changes, tenor extensions, lender substitutions — are executed through the prescribed processes rather than around them. Where ECB does not fit the need, we structure the alternative: equity, CCDs, or standby arrangements that deliver the funding compliantly.
What this covers
- ECB structuring against the framework: borrower eligibility, lender recognition, cost ceilings, maturity, and end-use.
- Loan Registration Number applications and pre-drawdown sequencing.
- Monthly ECB-2 reporting for the facility's life, plus revised filings on any change.
- Modification management: refinancing, restructuring, and lender changes done through prescribed routes.
- Alternative funding design where the ECB framework cannot accommodate the need.
Who needs this
Foreign parents funding Indian subsidiaries with debt; treasurers refinancing existing ECBs; and groups discovering that historic 'intercompany loans' were never registered as anything.
How we deliver
- Framework testing before commitment: borrower, lender, cost, maturity, and end-use.
- LRN obtained before drawdown; documentation sequenced correctly.
- Monthly ECB-2 returns and modification management for the facility's life.
Why A2 Consultants
Intercompany funding contraventions are among the most common we are hired to compound — which is why the ECBs we structure are built to the framework from day one, with the reporting run as routine.
Engagement & what to expect
Structuring engagements run ahead of funding needs: framework testing, term design, and documentation over three to six weeks, then LRN application and drawdown sequencing so funds move the moment approvals allow. Reporting engagements run monthly for the facility's life — ECB-2 returns filed to date, modifications processed through prescribed routes as commercial terms evolve. Legacy engagements begin differently: unregistered intercompany funding assessed honestly, with regularisation or restructuring sequenced before the exposure compounds further. In every mode, the deliverable is parent funding that stands as compliant debt.
Intercompany debt into India is a regulated product with a user manual — we make sure yours is built to it.