Current Month (June 2026)
Reserve Bank of India Notifies Structural Consolidation and Liberalization of External Commercial Borrowing Framework
By Siddartha Karnani, King Stubb & Kasiva
On February 9, 2026, the Reserve Bank of India has notified the Foreign Exchange Management (Borrowing and Lending) (First Amendment) Regulations, 2026 (Notification No. FEMA 3(R)(5)/2026-RB), which came into force upon publication in the Official Gazette on February 16, 2026. The amended Regulations represent the most comprehensive overhaul of India’s External Commercial Borrowing (“ECB”) framework in years, consolidating all ECB-related provisions previously scattered across the Master Direction on ECBs, Trade Credits and Structured Obligations and the Master Direction on Borrowing and Lending in Indian Rupee into a single, revised Schedule I of the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018.
The revisions touch every major dimension of the ECB regime. ECBs are loans and credit facilities raised by eligible resident borrowers in India from recognized non-resident lenders, and have historically been subject to extensive regulatory oversight. On pricing, the long-standing all-in cost ceiling of benchmark rate plus 500 basis points has been removed; the cost of borrowing, including prepayment charges and penal interest, is now market-determined, subject to acceptance by a designated Authorized Dealer (“AD”) Category I bank (commercial banks in India authorized to handle foreign exchange transactions). On the loan term, the minimum average maturity period has been standardized at three years across all end uses, replacing a tiered structure under which some end uses required a minimum term of up to ten years. On borrower and lender eligibility, the base has been expanded: Any entity resident in India, other than an individual, that is incorporated, established, or registered under any Central or State Act and permitted to raise ECBs under applicable law may now do so; and entities undergoing insolvency proceedings are expressly included as eligible borrowers, a deliberate linkage to the Insolvency and Bankruptcy Code, 2016 resolution framework.
On end use, the amendments introduce a significant commercial flexibility. ECB proceeds may now be deployed for strategic acquisitions, specifically including the acquisition of listed or unlisted Indian companies where a change of control is effected (a category previously prohibited). Working capital, general corporate purposes, and refinancing of existing ECBs are all permissible with the standardized three-year maturity. New Regulation 3A expressly restricts proceeds from being used for chit funds (an informal rotating savings-and-credit scheme registered under the Chit Funds Act, 1982, in which a fixed group of subscribers contributes periodic installments to a common pool that is disbursed by auction or lot), Nidhi companies (nonbanking finance companies recognized under Section 406 of the Companies Act, 2013, permitted to accept deposits from and lend only to their own members), real-estate business (except permitted categories), and repayment of loans that are otherwise restricted under the Foreign Exchange Management Act, 1999 (“FEMA”) (the principal legislation governing cross-border capital and current account transactions in India, under which the regulations discussed in this update have been issued). Reporting requirements have been streamlined through revised Forms ECB 1 and ECB 2, and the framework introduces a mechanism to designate “untraceable borrowers” who fail to meet ongoing Know Your Customer (“KYC”) or reporting obligations.
For business law practitioners advising Indian corporations, private equity sponsors, or offshore lenders, the practical significance is immediate. Market-linked pricing removes the need to structure around cost-cap arbitrage; the broadened end use provisions open the ECB route for leveraged acquisition financing that previously required alternative, more complex structures; and the consolidation of regulatory provisions into a single instrument simplifies due diligence on existing and new transactions. ECBs with Loan Registration Numbers obtained before February 16, 2026, remain governed by the prior regime, except for reporting, which now follows the revised rules. The Reserve Bank of India has published its response to stakeholder comments received on the October 2025 draft as an addendum to the notification.
NCLAT: Inclusion of Guarantor/Director in SARFAESI Notice Does Not Invalidate Invocation of Personal Guarantee
By Navod Prasannan, King Stubb & Kasiva
In the case of Ujwal Gupta v. Union Bank of India, Company No. 2001 of 2016, decided on January 7, 2026, by the National Company Law Appellate Tribunal (“NCLAT”), the Appellate Tribunal dismissed the personal guarantor plaintiff’s appeal against initiation of insolvency proceedings against him in respect of the debt owed by the principal borrower company to the Union Bank of India, pursuant to the provisions of Section 95 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). Gupta’s argument was that the notice of the demand issued by Union Bank of India was addressed to him as a director of the principal borrower company pursuant to the Securities and Reconstruction of Financial Assets and Enforcement of Security Interests Act 2002 (“SARFAESI Act”) could not be used as the basis by the Bank for commencing insolvency proceedings against him in the capacity of a personal guarantor.
The facts of the case are straightforward. Gupta executed a personal guarantee in favor of Union Bank of India to cover credit facilities made available to the principal borrower company. When the principal borrower’s account was classified as a nonperforming asset (“NPA”), the Bank issued a notice in accordance with section 13(2) of the SARFAESI Act requiring Gupta to repay any amounts claimed against the principal borrower’s account within sixty days of receiving such notice; otherwise, the Bank would proceed with enforcing its right to the security given by him. Gupta did not repay the Bank, and the Bank subsequently filed an application under Section 95 of the IBC before the NCLAT to initiate personal insolvency proceedings against him as a personal guarantor. The NCLAT admitted the application and Gupta appealed, arguing, inter alia, that the SARFAESI Act notice could not constitute valid invocation of his personal guarantee because it identified him as a director rather than as a guarantor.
A bench comprising Justices Mohamad Faiz Alam Khan and Naresh Salecha dismissed the appeal, affirming a substance-over-form approach to guarantee invocation. The NCLAT held that no particular form or mode of invocation is required unless expressly stipulated in the guaranteed deed; what matters is whether the notice, read in the context of the guaranteed agreement, clearly demands payment of the guaranteed debt and fastens liability on the guarantor. A demand notice that satisfies those requirements suffices to invoke the guarantee even if it also describes the guarantor in a secondary capacity, here, as director. The Tribunal further held that the liability of a personal guarantor is co-extensive with that of the principal debtor, and that procedural or authorization objections to the filing of a Section 95 petition are heavily scrutinized in the absence of substantive prejudice. The ruling builds on the NCLAT’s earlier three-member bench decision in Asha Basanti Lal Surana v. State Bank of India & Ors., Company Appeal (AT) (Insolvency) No. 84 of 2025, which held that a Section 13(2) notice expressly demanding payment from a guarantor constitutes valid invocation.
For practitioners advising financial creditors, the judgment affirms that banks need not issue a separate, purpose-specific invocation notice where a SARFAESI Act demand notice, on a proper reading, already calls upon the personal guarantor to discharge the guaranteed liability. For practitioners advising guarantors and directors, it highlights the risk of assuming that designation as “director” in a bank notice insulates an individual from personal insolvency exposure: Where a guaranteed deed exists and the notice substantively demands payment, the label attached to the notice will not be dispositive. The decision also reminds practitioners that hyper-technical procedural objections are unlikely to succeed at the appellate stage if no real prejudice can be demonstrated.
Delhi High Court Issues Dynamic Injunction Against IPL Piraters
By Sukrit Kapoor, King Stubb & Kasiva
In late March 2026, the Delhi High Court granted an ex parte ad interim injunction to Reliance Projects and Property Management Services Ltd. (“JioStar”) in suits CS(COMM) 313/2026 and 319/2026 to curb unauthorized streaming of the Tata Indian Premier League 2026
In late March 2026, the Delhi High Court granted ex parte ad interim dynamic injunctions in favour of JioStar India Private Limited in JioStar India Private Limited v. Https//Daddylives.Nl & Ors., CS(COMM) 313/2026, and JioStar India Private Limited v. Abbasi TV & Ors., CS(COMM) 319/2026, to curb unauthorized streaming of the TATA Indian Premier League 2026 (IPL) sporting events. In CS(COMM) 313/2026, Justice Tushar Rao Gedela restrained the identified rogue websites and unknown “Ashok Kumar” defendants from communicating, hosting, streaming or otherwise making available JioStar’s protected IPL content, and directed domain name registrars to lock or suspend the relevant domain names and disclose registrant/contact details, including names, addresses, email addresses, phone numbers, IP addresses, and payment details. In CS(COMM) 319/2026, Justice Jyoti Singh granted similar protection against rogue mobile applications and associated websites/UI/URLs, including directions for disclosure of contact, payment and Know Your Customer details. Internet service providers/telecom service providers, the Department of Telecommunications, and the Ministry of Electronics and Information Technology were directed to assist with blocking and enforcement.
In the latter case, the court noted that piracy websites and mobile apps rapidly replicate and migrate, making conventional injunctions ineffective. Borrowing from earlier cases, the order granted a “dynamic” injunction allowing JioStar to report future mirror or proxy websites to the authorities for immediate blocking without returning to court. The court also directed app store operators to remove infringing Android applications and extended the injunction to variants of the original sites, describing this as a “dynamic+” injunction.
For broadcasters and digital platforms, the decision demonstrates judicial willingness to adopt real-time enforcement tools to protect exclusive content. The dynamic injunction enables rights holders to respond quickly to new infringing URLs, reducing the window during which unauthorized streams remain accessible. But the order also imposes compliance burdens on registrars, internet service providers, and government agencies, who must act quickly on notices and ensure proper blocking of rogue websites and apps. Content owners should also be prepared to record infringing links more comprehensively to enable dynamic injunctions and to work with intermediaries and regulators to enable enforcement.
