Data on ECB / FCCB / RDB for August 2026, Check Important Points

The Reserve Bank of India has released the data on External Commercial Borrowings (ECB), Foreign Currency Convertible Bonds (FCCB) and Rupee Denominated Bonds (RDB) through General Permission and Special Permission for the month of August 2026.

Understand what is ECB, FCCB and RDB

External Commercial Borrowings (ECB), Foreign Currency Convertible Bonds (FCCB), and Rupee Denominated Bonds (RDB) are different ways through which Indian companies raise money from foreign investors or lenders. These instruments help companies obtain funds for business expansion, infrastructure projects, working capital and other permitted purposes. However, they differ in the currency of borrowing, repayment obligations and whether the lender can convert the debt into shares.

1. External Commercial Borrowings (ECB)

External Commercial Borrowings are loans raised by eligible Indian entities from recognised foreign lenders, subject to the applicable RBI and government rules.

Example: An Indian company borrows US$10 million from a foreign bank to set up a new factory in India. This loan is an ECB.

Key features:

• Funds are borrowed from sources outside India.
• ECBs may be raised in foreign currency or, where permitted, Indian rupees.
• The borrower must repay the principal and interest according to the loan agreement.
• ECBs are subject to applicable eligibility conditions, borrowing limits, maturity requirements and reporting rules.
• Foreign-currency ECBs can expose the borrower to exchange-rate risk if the rupee depreciates.

2. Foreign Currency Convertible Bonds (FCCB)

Foreign Currency Convertible Bonds are bonds issued by an eligible Indian company to investors outside India in a foreign currency. These bonds can be converted into the company’s equity shares under specified terms and conditions.

Example: An Indian company issues bonds worth US$5 million to foreign investors. The investors receive interest, and they may convert the bonds into the company’s shares under the agreed conversion terms.

Key features:

• The bonds are denominated in a foreign currency.
• Investors generally receive interest according to the bond terms.
• Investors have the option to convert the bonds into equity shares under specified conditions.
• If the bonds are not converted, the company generally has to repay the principal at maturity.
• FCCBs can create foreign-exchange risk and potential dilution of existing shareholders’ ownership if converted into shares.

3. Rupee Denominated Bonds (RDB)

Rupee Denominated Bonds are bonds issued to raise funds where the principal and interest are denominated in Indian rupees. In the international borrowing context, these are commonly associated with Masala Bonds, which are rupee-denominated bonds issued overseas.

Example: An Indian company issues bonds worth ₹500 crore to investors in London. The principal and interest are payable in Indian rupees under the bond terms. This is an example of a rupee-denominated bond issued overseas.

Key features:

• The bonds are denominated in Indian rupees.
• They can help Indian companies raise funds from international investors.
• The Indian issuer’s repayment obligation is in rupees, so it generally avoids direct foreign-currency repayment risk on the principal and interest.
• Foreign investors bear the exchange-rate risk because the value of their rupee-denominated investment can change when converted into their home currency.
• The issue must comply with the applicable regulatory framework.

Difference between ECB, FCCB and RDB

Easy way to remember

• ECB = External loan: An Indian company borrows from a recognised foreign lender.
• FCCB = Foreign-currency bond + conversion option: Investors may convert the bond into company shares.
• RDB = Rupee-denominated bond: The bond’s principal and interest are denominated in Indian rupees.

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