Q. Which of the following can be categorized as External Commercial Borrowings (ECBs)?
1.Foreign currency convertible bonds
2.Foreign currency exchangeable bonds
3.Foreign exchange reserves
Select the correct answer using the codes given below;
Answer: B
Notes:
ECBs are commercial loans that eligible resident entities can raise from outside India, i.e. from a recognized non-resident entity.
ECBs can be buyer’s credit, supplier’s credit, foreign currency convertible bonds, foreign currency exchangeable bonds, and loans among others.
ECBs can be raised via the automatic route where cases are examined by Authorized Category Dealer or the approval route where borrowers are mandated to forward their request to RBI through their authorized dealers.
Source: Livemint
