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  • External Commercial Borrowing (ECB)

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    External Commercial Borrowings (ECBs) allow Indian corporations and public sector undertakings to access foreign money. ECBs include bank loans, buyers' credits, bonds, and other instruments from international banks, capital markets, multilateral institutions, export credit agencies, equipment suppliers, foreign collaborators, and equity holders. For an equity holder to qualify as an automatic route lender, they must hold a minimum of 25% paid-up equity directly in the borrowing company. Between January and July 2012, India Inc. borrowed $20.4 billion in ECBs, with almost 80% of that going to infrastructure sectors like oil, power, and steel.

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    Some notes on the External Commercial Borrowing

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    FM ECB

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    External Commercial Borrowings (ECBs) allow Indian corporations and public sector undertakings to access foreign money. ECBs include bank loans, buyers' credits, bonds, and other instruments from international banks, capital markets, multilateral institutions, export credit agencies, equipment suppliers, foreign collaborators, and equity holders. For an equity holder to qualify as an automatic route lender, they must hold a minimum of 25% paid-up equity directly in the borrowing company. Between January and July 2012, India Inc. borrowed $20.4 billion in ECBs, with almost 80% of that going to infrastructure sectors like oil, power, and steel.

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    4 views3 pages

    External Commercial Borrowing (ECB)

    Uploaded by

    nikhilmtech
    External Commercial Borrowings (ECBs) allow Indian corporations and public sector undertakings to access foreign money. ECBs include bank loans, buyers' credits, bonds, and other instruments from international banks, capital markets, multilateral institutions, export credit agencies, equipment suppliers, foreign collaborators, and equity holders. For an equity holder to qualify as an automatic route lender, they must hold a minimum of 25% paid-up equity directly in the borrowing company. Between January and July 2012, India Inc. borrowed $20.4 billion in ECBs, with almost 80% of that going to infrastructure sectors like oil, power, and steel.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
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    External Commercial Borrowing (ECB)

    Facilitates the access to foreign money by Indian corporations and PSUs (public sector undertakings) ECBs include commercial bank loans, buyers' credit, securitized instruments such as floating rate notes and fixed rate bonds
    International banks International capital markets Multilateral financial institutions (such as ADB) Export credit agencies Suppliers of equipments Foreign collaborators and Foreign equity holders

    A "foreign equity holder" to be eligible as recognized lender under the automatic route would require minimum holding of paidup equity in the borrower company as set out below: For ECB up to USD 5 million minimum paid-up equity of 25 per cent held directly by the lender, For ECB more than USD 5 million minimum paid-up equity of 25 per cent held directly by the lender and ECB liabilityequity ratio not exceeding 4:1

    Recent News on ECB


    On 12 Sept 2012, the RBI On 15 Sept 2012, Govt allowed ECB from China (Renminbi) with a cap of $1 Bn

    Between January and July 2012, India Inc borrowed US$ 20.4 Bn

    Almost 80% of ECB into Infra sector (i.e.) industries like Oil & Petroleum, Power, Iron & Steel, etc.

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