i. Clarification on Hedging: The RBI, on November 7, 2016, clarified that: (a) in cases where hedging for external commercial borrowings (‘ECB’) is mandatory, the ECB borrower will be required to cover principal as well as interest of the ECB through financial hedges from the start of each such exposure; (b) the financial hedges should be for a minimum tenor of one year with a periodic rollover and the exposure on account of ECB should not be unhedged; and (c) any natural hedging in lieu of financial hedging, will be considered only to the extent of offsetting projected cash flows/ revenues in matching currency, net of all other projected outflows.ii. Extension and Conversion: The RBI has, pursuant to its circular dated October 20, 2016, allowed AD Category – I banks to, subject to other conditions:a. approve requests from borrowers for changes in repayment schedule of an ECB prior to its maturity, provided the average maturity and all-in-cost are in conformity with applicable norms, and subject to there being: (A) no additional cost incurred; (B) lender’s consent for such changes; and (C) satisfaction of reporting requirements; andb. approve cases of conversion of matured but unpaid ECB into equity.iii. ECBs for Startups: The RBI has, pursuant to its circular dated October 27, 2016, permitted all startups recognized by the GoI to access borrowings in the form of loans or non-convertible, optionally convertible or partially convertible preference shares under the ECB framework up to a limit of US$ 3 million (approximately Rs. 20.33 crores). The minimum average maturity period of such borrowing is three years for end use in relation to expenditure in connection with the business of the borrower.