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External commercial borrowing

External commercial borrowing (ECB) is a fund-raising process through which Indian companies can approach foreign investors for money. ECBs, which are a type of foreign loan, can be in various forms like debt from commercial banks and other lenders and investors, buyers' and suppliers' credit, bonds of various types, etc. Since the market rate of interest in the US, EU and some other developed markets is near-zero, compared to around double-digit mark in India, Indian companies find it cheaper to get funds through ECBs. Funds raised through this channel can be used for business purposes, including partial repayment of domestic debt but cannot be invested in the stock market or for speculative deals. The finance ministry and the RBI are the two main bodies which regulate ECBs in India.