Q. Consider the following statements regarding “External Commercial Borrowings (ECB’s)”:
1.ECB’s are commercial loans widely used by eligible resident entities that raise ECBs from recognized non-resident entities.
2.ECB’s are governed by the Foreign Exchange Management Act (FEMA).
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:

Explanation: External Commercial Borrowings are commercial loans widely used by eligible resident entities that raise ECBs from recognised non-resident entities.

ECBs should adhere to the criteria like minimum maturity period, maximum all-in-cost ceiling, permitted and non-permitted end-uses, etc. ECBs are governed by the Foreign Exchange Management Act (FEMA).

Source: FORUMIAS