RBI modified procedure for External Commercial Borrowings Policy

The Reserve Bank of India (RBI) gave more power to banks to restructure external commercial borrowings (ECBs) of companies. RBI has allowed the banks,

• To modify the draw-down and repayment schedules of the ECBs.
• To change the ECB loan from one company to another in case of re-organization or merger.
• To reduce the amount of ECB along with any changes in draw-down and repayment schedules.

Knowledge is Wealth

What is ECB?

ECB is nothing but the money that has been borrowed from foreign resources such as Commercial bank loans, Buyers’ or suppliers’ credit, borrowings from Financial Institutions (ADB or AFIC)..etc for financing the commercial activities in India. 

ECB vs FDI

We should not confuse ECB with the FDI. Because the former deals with funding other than Equity. While the latter is associated with financing the Equity Capital.