External Commercial Borrowings

According to the Reserve Bank of India (RBI), agreements for external commercial borrowings (ECBs) signed by Corporate India jumped to a massive $12 billion in the April-June quarter of 2023, three times the level in the previous year.

  • ECBs refer to commercial loans [in the form of bank loans, buyers’ credit, suppliers’ credit, securitised instruments (e.g. floating rate notes and fixed rate bonds)] availed from non-resident lenders with minimum average maturity of 3 years.

Routes of ECB

  • Automatic Route: If a company passes all the prescribed norms specified by the government, it can raise money without any prior approval.
  • Approval Route: For ....
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