What Is a Loan Registration Number?
A Loan Registration Number (LRN) is the identifier the Reserve Bank of India (RBI) allots to a specific External Commercial Borrowing (ECB) once the borrower has reported the loan's terms to RBI through its bank. It is not a tax registration, a company registration, or a loan approval in the ordinary sense — it is RBI's record that a particular foreign-currency or rupee borrowing by an Indian entity from a non-resident lender exists and has been reported under the Foreign Exchange Management Act (FEMA). The rule that matters most in practice: an eligible borrower may not draw down the ECB proceeds until the LRN has been obtained. Drawing down first and registering later is a contravention, not a technicality.
Legal Basis
Notification FEMA 3(R)(5)/2026-RB
The current LRN framework runs on Notification No. FEMA 3(R)(5)/2026-RB, dated 9 February 2026, in force from 16 February 2026, which substituted Schedule I of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 (Notification No. FEMA 3(R)/2018-RB, dated 17 December 2018). Schedule I is the part of the 2018 Regulations that sets out the ECB framework — eligible borrowers, recognised lenders, the borrowing limit, minimum average maturity, cost rules, and the reporting forms. The February 2026 notification rewrote that schedule in full. It also reached the body of the parent Regulations: paragraph 2 substituted regulation 2 (definitions, including "benchmark rate" and "cost of borrowing"), paragraph 3 inserted a new regulation 3A restricting the end-use of borrowed funds, and paragraph 4 substituted regulation 6(B)(vi) on INR borrowing by a resident individual from an NRI or OCI relative.
A transitional clause protects loans registered before the change. It sits in the notification itself rather than in the substituted schedule: paragraph 1(3), under the heading "Short title and commencement", provides that an ECB for which an LRN was obtained before the new regulations took effect "shall continue in compliance with the then applicable regulations, except reporting which shall be undertaken as per the amended regulations." In plain terms: a company that registered its ECB under the pre-16-February-2026 rules keeps its old maturity, pricing, and end-use terms — it does not have to renegotiate the loan to fit the new limits — but from 16 February 2026 onward it must file its ongoing returns in the new format and on the new schedule. The LRN itself does not need to be reapplied for.
How an LRN Is Obtained
The application is made through the borrower's Authorized Dealer (AD) Category-I bank, not directly with RBI and not through the FIRMS portal used for FDI reporting. Paragraph 16(1)(a) of the substituted schedule requires the borrower to use "Form ECB 1" — in the notification's words, "for providing details of the ECB and obtaining LRN". The designated AD Category-I bank forwards the application with its certification, and RBI allots the LRN through that bank. Paragraph 10(1) states the drawdown bar without qualification: "An eligible borrower shall drawdown ECB only after obtaining the Loan Registration Number (LRN) from Reserve Bank through the designated AD Category I bank." Because the drawdown cannot precede the LRN, borrowers who need funds by a fixed date should file Form ECB 1 with enough lead time for the AD bank's checks and RBI's allotment before that date — the notification does not fix a processing timeline, so this is a practical planning point rather than a statutory deadline.
If the terms of an already-registered ECB change after the LRN is allotted — for example, a change to the amount, the maturity, or the lender — the change is reported on "Revised Form ECB 1," filed again through the same AD Category-I bank within seven calendar days from the end of the month in which the change was given effect (paragraph 16(1)(b)). This is a distinct filing from the periodic drawdown report described below, and the two must not be confused: Revised Form ECB 1 updates the loan's registered parameters; it does not itself report money movement.
Reporting After the LRN Is Allotted
Once an LRN exists, the borrower's ongoing reporting obligation is "Form ECB 2," which records the receipt of ECB proceeds and debt servicing (interest and repayment). Form ECB 2 is due within seven calendar days from the end of the month in which the proceeds were received or debt servicing was undertaken — not seven days from the drawdown date itself — and it is filed through the designated AD Category-I bank. This seven-days-from-month-end clock applies to loans registered under the new schedule and, by virtue of the paragraph 1(3) transitional rule in the notification described above, to pre-existing LRNs as well: the reporting timeline is uniform even though the substantive loan terms of older ECBs are grandfathered.
Numbers That Shape the LRN You Register
The terms a borrower reports on Form ECB 1 must fit within the limits the substituted Schedule I sets:
- Borrowing limit (paragraph 5). An eligible borrower may raise ECB up to the higher of outstanding ECB of USD 1 billion, or total outstanding borrowing — external and domestic combined — up to 300% of net worth per the last audited standalone balance sheet, excluding non-fund-based credit and mandatorily convertible securities.
- Minimum average maturity period (MAMP). Three years, with a carve-out for manufacturing-sector borrowers, who may raise ECB of one to three years' average maturity capped at USD 150 million outstanding.
- Cost of borrowing (paragraph 7). The fixed all-in-cost ceiling is gone for ECB with an average maturity of three years or more; cost must simply be "in line with prevailing market conditions". ECB with an average maturity below three years must instead comply with the cost ceiling specified for Trade Credit under the same Regulations — benchmark plus 300 basis points for foreign-currency borrowing, benchmark plus 250 basis points for rupee-denominated borrowing.
These figures determine what a compliant Form ECB 1 can say. An ECB proposed outside them does not comply with the substituted Schedule I, which no longer divides ECB into an automatic route and an approval route — the limits apply to every eligible borrower.
Why the LRN Matters for a Foreign Investor
For a foreign parent funding its Indian subsidiary, or a non-resident lender extending credit to an Indian borrower, the LRN is the single control point that makes the whole ECB legal. Three consequences follow from getting it wrong:
- No LRN, no drawdown. Money received before an LRN is allotted is proceeds of an unauthorised borrowing under FEMA, regardless of how straightforward the loan documentation is.
- A contravention is a FEMA contravention, not a paperwork lapse. Drawing down without an LRN, or failing to file Form ECB 2 on time, exposes the borrower and its officers to action under FEMA, including monetary penalty. Most such lapses are resolved through the FEMA compounding mechanism rather than adjudication, but compounding is a remedy for a contravention that has already occurred — it is not a substitute for filing on time.
- The AD bank is the gatekeeper, and the FIRMS portal is the wrong channel. Both Form ECB 1 and Form ECB 2 move through the designated AD Category-I bank. Foreign investors used to routing FDI reporting through the FIRMS portal should not assume the same channel applies to ECB — it does not.
Worked Example
A US-incorporated parent agrees to lend its wholly owned Indian subsidiary USD 4 million for four years to fund plant expansion. Before any money moves, the Indian subsidiary files Form ECB 1 through its AD Category-I bank, reporting the loan amount, the four-year average maturity (which clears the three-year MAMP), the lender, and the agreed cost. RBI allots an LRN through the bank. Only after the LRN is in hand does the subsidiary draw down the USD 4 million. If the loan's maturity is later extended by mutual agreement, the subsidiary files Revised Form ECB 1 to update that parameter. Each month in which the subsidiary receives a tranche of the loan or pays interest, it files Form ECB 2 through the same AD bank within seven calendar days of that month's end — for a drawdown received on 20 March, the Form ECB 2 deadline is 7 April, not seven days after 20 March.
Frequently Asked Questions
Which form is used to apply for a Loan Registration Number, and who files it?
The borrower applies using Form ECB 1, which is filed with the designated AD Category-I bank rather than directly with RBI. The AD bank forwards the application, and RBI allots the LRN through that same bank. The borrower does not use the FIRMS portal for this filing.
Can an Indian company draw down ECB proceeds before its LRN is allotted?
No. The substituted Schedule I states that an eligible borrower may draw down ECB only after obtaining the LRN from RBI through its designated AD Category-I bank. Receiving proceeds beforehand is a contravention under FEMA, independent of whether the underlying loan agreement is otherwise in order.
Do loans that already had an LRN before 16 February 2026 need to register again?
No. Paragraph 1(3) of the notification lets such ECBs continue on the terms under which they were originally registered. The one change that applies to them going forward is reporting: from 16 February 2026, they follow the same reporting rules — including the Form ECB 2 timeline — as newly registered loans.
What is the difference between Form ECB 2 and Revised Form ECB 1?
Form ECB 2 reports money movement — drawdowns and debt servicing — on a recurring basis, within seven calendar days of the end of the month in which they occurred. Revised Form ECB 1 is filed only when the registered terms of the loan itself change, such as its amount or maturity; it updates the loan's record rather than reporting a transaction.
Which bank handles the LRN application and the ongoing ECB reporting?
The same institution throughout: the borrower's designated AD Category-I bank. It receives Form ECB 1 to obtain the LRN, Revised Form ECB 1 for parameter changes, and Form ECB 2 for drawdown and debt-servicing reports. RBI does not accept these forms directly from the borrower.
See also: External Commercial Borrowing (ECB), Authorized Dealer Bank, and FEMA.
Structuring a cross-border loan into an Indian entity? Beacon Filing helps foreign investors register and report ECBs correctly from the first drawdown.