Consider the following statements 1 The External Commercial Borrowings ECBs is a portion of a countr...........

Economic Affairs Foreign Investment

Consider the following statements

1. The External Commercial Borrowings (ECBs) is a portion of a country's debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions.

2. The International Monetary Fund (IMF) keeps track of the country's external debt.

Select the correct statements using the codes given below

1 Only

2 Only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Both the statements are correct.

ECB is basically a loan availed by an Indian entity from a nonresident lender. Most of these loans are provided by foreign commercial banks and other institutions. It is a loan availed of from non-resident lenders with a minimum average maturity of 3 years.

The significance of ECBs their size in India’s balance of payment account. In the post reform period, ECBs have emerged a major form of foreign capital like FDI and FII.

The International Monetary Fund (IMF) is one of the agencies that keep track of the country's external debt. The conditions of a default can make it challenging for a country to repay what it owes, plus any penalties the lender has brought against the delinquent nation.