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External commercial borrowing (ECB) registrations and disbursements during April 2024 – January 2025 on a cumulative basis were significantly higher than those recorded in the corresponding period of the previous year, according to RBI’s latest monthly bulletin.
ECB registrations increased by 21 per cent yoy during April 2024 – January 2025 to US$ 47.3 billion against US$ 39.2 billion in the year ago period. Disbursements were up 40.5 per cent yoy at US$ 42.3 billion (US$ 30.1 billion).
External Commercial Borrowings refer to commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit, securitised instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years.
ECB outflows due to principal repayments stood at US$ 23.9 billion during this period (US$ 22.6 billion), resulting in robust net inflows of US$ 18.4 billion (US$ 7.5 billion) — more than twice the level observed in the corresponding period of the previous year.
Of the total ECBs registered during April 2024 - January 2025, nearly 44 per cent were intended for capital expenditure purposes.
The continued decline in the secured overnight financing rate (SOFR) since August 2024 has contributed to a reduction in the overall cost of ECBs. In January 2025, the overall cost of ECBs declined by 129 bps compared with the corresponding period of the previous year.
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