Cap on External Commercial Borrowings breached

Mumbai, May 31: Official data today revealed that in the financial year 2007, the cap on External Commercial Borrowings (ECB) has been comfortably breached as local interest rates kept shooting up over the past few months, prompting more and more Indian companies to resort to raising debt at cheaper rates from foreign shores.

The final ECB figure of USD 25.35 billion is way above the internal cap of USD 22 billion set by the Finance Ministry for the year ended March 2007.

Foreign borrowings in 2006-07 rose by around 50 per cent compared with FY06 when it was USD 17.13 bn.

The figures released by the Reserve Bank of India (RBI) also includes borrowings through Foreign Currency Convertible Bonds (FCCBs), the Central Bank clarified.

UNI