ECB refers to external commercial borrowings where every financial transaction from the international market falls under the foreign exchange management act including the rules and regulations of RBI. ECB is widely used for taking financial help in the form of loans, bonds, or other financial instruments including business expansion and loan repayment. It can be obtained from a variety of sources like foreign banks, international financial institutions, etc. The whole ECB is regulated by the RBI which is responsible for setting limits on the amount of ECB and the purpose of the use. However, for ECB, a company must meet certain eligibility criteria such as credit rating and debt-equity ratios.
