A.P. (DIR Series) Circular No. 25
RBI/2025-26/253 | March 30, 2026
The Reserve Bank of India has issued A.P. (DIR Series) Circular No. 25 dated March 30, 2026, introducing important changes to the reporting framework for External Commercial Borrowings (ECB) under the Foreign Exchange Management Act, 1999.
These amendments aim to streamline compliance, clarify the computation of Late Submission Fees (LSF), and strengthen monitoring by Authorised Dealer (AD) Category I Banks.
Key Changes Introduced
1. Classification of ECB Forms
- Form ECB 1 and Revised Form ECB 1 will now be treated as non-flow returns.
- Consequently, LSF for delays in submission will be computed under the category applicable to non-flow returns, which may alter the fee calculation methodology.
2. LSF Computation – Per Return Basis
- The Late Submission Fee (LSF) will be calculated per return.
- Each delayed submission of Form ECB 2 under a Loan Registration Number (LRN) will be treated as a separate instance for computing the fixed component of LSF.
3. Strict Timeline for AD Banks
- AD Category I Banks must submit ECB returns to RBI within 7 calendar days from the date of receipt from the borrower.
- Returns must be complete in all respects and duly certified.
4. Payment Mechanism for LSF
- LSF is payable only after RBI acknowledgment of the return.
- Payment must be made via NEFT/RTGS to the concerned RBI Regional Office.
- Detailed payment instructions will be shared through the acknowledgment email.
5. Monitoring Responsibility on AD Banks
- AD Category I Banks are now responsible for monitoring the payment of LSF by their customers.
- This adds an additional layer of oversight and accountability for banks.
Effective Date
- These revised directions are effective from April 1, 2026.
The RBI’s latest update reinforces its focus on timely and accurate ECB reporting while tightening the LSF framework. Both borrowers and AD Banks must revisit their internal processes to ensure compliance and avoid penal costs under the revised regime.
