New 55% Off on All Courses - Enroll Now! Click Here

    Question

    What is the maximum amount of ECB any eligible borrower

    can raise per financial year under the automatic route?
    A USD 1 billion or equivalent Correct Answer Incorrect Answer
    B USD 750 million or equivalent Correct Answer Incorrect Answer
    C USD 500 million or equivalent Correct Answer Incorrect Answer
    D Max limit depends on debt/equity ratio of borrower Correct Answer Incorrect Answer
    E No such limit Correct Answer Incorrect Answer

    Solution

    As per ECB framework, all eligible borrowers can raise ECBs up to USD 750 million or equivalent per financial year under the automatic route. Further, in case of FCY denominated ECB raised from direct foreign equity holder, ECB liability-equity ratio for ECB raised under the automatic route cannot exceed 7:1.

    Practice Next

    Relevant for Exams: