RBI's approval, once granted, will be valid for three months and companies will have to execute the loan agreement within that period. After signing the loan agreement with the lender, the company will have to submit a form with the RBI for allotment of loan registration number (LRN). The approval will stand cancelled if companies failing to obtain LRN within seven days, the central bank said. Banks in India will not be permitted to provide any form of guarantee to the borrowers. However, banks will be allowed to open Nostro accounts in renminbi and will have to monitor the end-use of funds.
All other conditions of ECB, such as eligible borrower, recognised lender, all-in-cost, average maturity, prepayment, refinancing of existing ECB and reporting arrangements shall remain unchanged and shall be complied with, the RBI said in a notification.