External Commercial Borrowings And Foreign Investments In India
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Free sample — 8 of 65 rapid-fire Q&A cards.
What is the definition of External Commercial Borrowings (ECB) in India?
ECB refers to commercial loans raised by eligible resident entities from recognised non-resident lenders, including bank loans, buyers' credit, suppliers' credit, securitised instruments, and bonds.
What is the maximum ECB amount an eligible borrower can raise under the automatic route?
Up to USD 750 million per financial year
Which regulatory framework governs External Commercial Borrowings in India?
ECBs are governed by the Foreign Exchange Management Act (FEMA), 1999, and the RBI's ECB framework issued under FEMA (Borrowing and Lending) Regulations.
What is the minimum average maturity period for ECBs raised under Track II?
Ten years, regardless of the amount borrowed
What are the two tracks under which ECBs can be raised as per the revised RBI framework?
ECBs can be raised under Track I (medium-term foreign currency denominated ECB) and Track III (Rupee-denominated ECB/Masala bonds), with Track II having been merged into Track I.
What is a Rupee-denominated ECB also commonly known as?
Masala Bond
What is the minimum average maturity period for ECBs raised under Track I?
The minimum average maturity period is 3 years for ECBs up to USD 50 million, and 5 years for ECBs above USD 50 million equivalent per financial year.
What does the abbreviation LEC stand for in foreign investment context?
Liberalised Equity Capital
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