Net inflows of external commercial borrowings (ECBs) grew 159% to $4.4 billion dollar in the first two months of the current financial year as compared with $ 1.7 billion during the same period last year. However, new registrations contracted 31% to $5.7 billion from $8.3 billion during the same period, data from RBI’s July bulletin show.
ECB for capex
Nearly 48% of the total ECBs registered during this period were intended for capital expenditure, including on-lending and sub-lending for capex.
Rise in ECBs
In fact, net ECBs rose more than five times to $18.7 billion in FY25, compared with $3.6 billion a year ago. The appetite for overseas loans was caused by a decline in costs of foreign funds, and lenders, especially non-banking financial companies, increased tapping this market after the central bank revised the capital norms in 2023.