Which of the following statements is/are correct?

1. An External Commercial Borrowing (ECB) is an instrument used in India to facilitate access to foreign money by the Indian corporations and PSUs (Public Sector Undertakings).

2. Only the Reserve Bank of India monitors and regulates ECB guidelines and policies.

Select the correct answer using the code given below:

– An External Commercial Borrowing (ECB) is an instrument used in India to facilitate access to foreign money by the Indian corporations and PSUs (Public Sector Undertakings).

– ECBs include commercial bank loans, buyers’ credit, suppliers’ credit, securitized instruments, such as floating rate notes and fixed rate bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window of multilateral financial institutions, such as the International Finance Corporation (Washington), the Asian Development Bank (ADB), a French Private Equity Association (AFIC), the Commonwealth Development Corporation (CDC), etc. ECBs cannot be used for investment in stock market or speculation in real estate.

– The Department of Economic Affairs, Ministry of Finance, Government of India along with the Reserve Bank of India monitors and regulates ECB guidelines and policies. For infrastructure and green-field projects, funding up to 50% (through ECBs) is allowed. In telecom sector too, up to 50% funding through ECBs is allowed.