Question

Q. Consider the following statements regarding External Commercial Borrowing.

Which of the statements given above is/are correct?

• A.
  1 only
• B.
  1 and 2 only
• C.
  2 and 3 only
• D.
  1, 2 and 3

Answer 1

The correct option is A

1 only
Explanation:

Statement 1 is correct: ECBs refer to commercial loans in the form of Bank loans, securitized instruments, buyers credit, suppliers credit availed of from non-resident lenders with a minimum maturity of 3 years.

Statement 2 is incorrect: The depreciation in domestic currency will increase the liability of ECB borrower.

Statement 3 is incorrect: The ECB borrowings are for a long term.