What does ECB stand for?
External Commercial Borrowing
External Commercial Borrowing short for ECB. External Commercial Borrowing (ECB) refer to any money that is borrowed from foreign sources for financing the commercial activities in India. ECBs comprise Commercial bank loans, Buyers’ credit and suppliers’ credit, Securitized instruments such as Floating Rate Notes and Fixed Rate Bonds etc.
ECBs can be taken up under two routes:
- Under the Automatic Route, the Indian company can apply with its local Indian bank for a permission to avail an ECB if certain parameters are met.
- Under the Approval Route, the Indian company has to ask the RBI for a specific permission to avail an ECB especially if certain parameters are proposed to be exceeded.