State the conditions pertaining to conversion of External Commercial Borrowings (ECBs) into Equity.

Conditions for converting ECBs into Equity Conversion of ECBs into Equity is permitted (including those which are matured but unpaid) subject to the following conditions: (i) The activity of the borrowing company is covered under the automatic route for FDI or approval route from the Foreign Investment Promotion Board, wherever applicable, for foreign equity participation has been obtained as per the extant FDI policy. (ii) The conversion, which should be with the lender's consent without any additional cost, will not result in breach of applicable sector cap on the foreign equity holding. (iii) Applicable Pricing guidelines of RBI should be fulfilled. (iv) If borrower concerned has availed of other credit facilities from the Indian banking system, including overseas branches/ subsidiaries, the applicable prudential guidelines issued by the Department of Banking Regulation of RBI, including guidelines on restructuring are compelled with, (v) Consent of other lenders, if any, to the same borrower is available or at least information regarding conversion is exchanged with other lenders of the borrower. (vi) In-principle approval of the Stock Exchange where equity shares of the borrower is listed is required before issuance of ECB (FCCBs) which has conversion options. (vii) Post conversion of ECBs into equity shares, the listing and trading permission is to be obtained from the Stock Exchange where its equity shares are listed.