Which of the following foreign borrowings are considered under External Commercial Borrowings(ECBs) in India?
Which of the following foreign borrowings are considered under External Commercial Borrowings(ECBs) in India?
[A]Buyer’s credit
[B]Supplier’s credit
[C]Bank loans
[D]All the above
All the above
The ECBs are defined as money borrowed from foreign resources including the following: Commercial bank loans, Buyers’ credit and suppliers’ credit, Securitised instruments such as Floating Rate Notes and Fixed Rate Bonds , and Credit from official export credit agencies and commercial borrowings from the private sector window of Multilateral Financial Institutions such as International Finance Corporation (Washington), ADB, AFIC, CDC, etc. Recently, the Reserve Bank of India (RBI) has liberalised foreign currency borrowing norms for Indian companies. RBI has allowed pension funds, insurance funds, sovereign wealth funds to become potential lenders to Indian firms. This measure will help to more Indian firms to raise foreign funds. The RBI also raised the limit for small value external commercial borrowings(ECBs) with minimum average maturity of three years to $50 million from $20 million earlier.