(i) the bridge finance shall be replaced with a long term ECB;
(ii) the long term ECB shall comply with all the extant ECB norms; and
(iii) prior approval shall be sought from the Reserve Bank for replacing the bridge finance with a long term ECB.
3. On a review, it has been decided to allow refinancing of such bridge finance (if in the nature of buyers’/suppliers’ credit) availed of, with an ECB under the automatic route subject to the following conditions:-
(i) the buyers’/suppliers’ credit is refinanced through an ECB before the maximum permissible period of trade credit;
(ii) the AD evidences the import of capital goods by verifying the Bill of Entry;
(iii) the buyers’/suppliers’ credit availed of is compliant with the extant guidelines on trade credit and the goods imported conform to the DGFT policy on imports; and
(iv) the proposed ECB is compliant with all the other extant guidelines relating to availment of ECB.
4. The borrowers will, therefore, approach the Reserve Bank under the approval route only at the time of availing of bridge finance which will be examined subject to conditions mentioned in para 2(i) and (ii).
Ref:-RBI/2012-13/201-A.P. (DIR Series) Circular No. 27 dated September 11, 2012