RBI proposes to reduce the standards of the European Central Bank: flexible limits, comfortable rules, wider arrival to borrow India

The Indian Reserve Bank (RBI) has suggested a significant alleviation of the external trade borrowing rules (ECBS), which aims to make donation abroad more simple and more attractive to Indian companies. The draft frame, issued on October 3, 2025, seeks to rationalize foreign exchange management regulations (borrowing and lending), 2018 under Fema, 1999.

This advertisement follows the RBI statement on development and organizational policies that were conducted on October 1. The central bank said that the reviews were designed to improve corporate credit flows while reducing unnecessary compliance requirements.

Main proposals

The frame project highlights four main changes:

The borrowing limits associated with financial strength: instead of the maximum uniform borrowing, companies will be allowed to raise ECBS based on their financial health, giving companies the strongest flexibility.

The interest rates determined by the market: loan prices will be liberated, allowing borrowers and lenders to negotiate the prices that are compatible with the market conditions.

Simplify the rules of final use and maturity: The restrictions imposed on how to spread money will be relaxed, in addition to the minimum maturity periods, to provide companies with more freedom to use.

Expand the borrower and loan base: The group of eligible participants will be expanded on both sides of the European Central Bank transactions, which opens the door for more companies and institutions to participate.

In addition, RBI suggested simplifying the requirements for preparing reports to reduce compliance burdens-a long-term request for India Inc.

The effects of industry

If this is completed, it is expected that the changes of Indian companies will help diversify the sources of financing, pressure cheaper credit abroad, and reduce dependence on local borrowing. Analysts say the infrastructure, manufacturing and intensive capital companies will benefit more than the new rules.

At the same time, experts warn against the European Central Bank’s flows carefully to avoid currency risks, especially if companies do not have natural hedges against foreign drainage fluctuations.

General reactions

The framework project was published on the RBI on the web for public consultation. The stakeholders were invited to submit comments or suggestions by October 24, 2025, through the “Connect 2 Organization” portal or via e -mail, with the topic line “Reactions on the ECB Framework” project.

The central bank said it would review the requests submitted by industry, bank and public players before completing the new standards.

Through this step, RBI appears to be ready to update the external borrowing system in India, and a balance between easier access to global capital with the need for financial stability.