External Commercial Borrowings (ECBs) in
India
Within a narrow span of two years, foreign debt more than
doubled, as domestic lenders adopted a cautious stance upon
considering the fallout of a liquidity crisis, and as India's
Central Bank eased rules for using overseas borrowings. As depicted
by the data of Reserve Bank of India (RBI), the total external
commercial borrowings – i.e. loans granted by non-resident
entities to eligible Indian borrowers in foreign currency,
increased by a whopping 61.45 percent year-on-year to USD 50.15
billion, as of December 2019. This happens to be a 117 percent jump
from the numbers of 2017.
External Commercial Borrowings (ECB) refers to the debt
shouldered by an eligible entity in India for solely commercial
purposes, that has been extended by external sources, i.e. from any
recognized entity outside India. These borrowings are expected to
conform to norms and conditions put forth by the RBI. The ECBs fall
under the umbrella of
