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What is meant by External Commercial Borrowings (ECBs)in context of India?

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posted Jul 27 by Sunita

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1 Answer

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ECB or External Commercial Borrowings is a method by which the Government and many Indian companies especially the PSUs get access to foreign money. It is a method by which borrowings are mobilised outside India for projects in India.

One of the major advantage of raising ECBs is that the interest rates are very low since the major currency denominations like USD and GBP have very low rates for lending. Indian entities are not permitted to use the entire borrowing for repaying a loan in INR. They have to use this amount mainly for financing their Capital projects.

ECBs can be in any form. Loans, credits, or even securities instruments. But they are not allowed to be traded via any Stock Exchange.

answer Jul 28 by Sulekha Kumari
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