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      Question

      Which of the following is an example of an 'External

      Commercial Borrowing' (ECB)?
      A A loan taken by an Indian company from a domestic SBI branch. Correct Answer Incorrect Answer
      B Equity issued by a company on the National Stock Exchange (NSE). Correct Answer Incorrect Answer
      C Loans raised by Indian entities from non-resident lenders in foreign or Indian currency. Correct Answer Incorrect Answer
      D Funding provided by the Government of India to a Public Sector Undertaking. Correct Answer Incorrect Answer
      E A grant received from an international NGO for social work. Correct Answer Incorrect Answer

      Solution

      ECBs are commercial loans raised by eligible resident entities from recognized non-resident entities, subject to RBI regulations regarding parameters like minimum maturity and maximum cost. External Commercial Borrowings (ECBs) are instruments that facilitate Indian companies to raise money from foreign sources for business expansion.

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