<<1234567891011121314151617181920212223242526>> 1. What is External Commercial Borrowing (ECB)?A loan provided by Indian entities to non-resident lendersA loan availed by non-resident entities from Indian lendersA loan availed by an Indian entity from a non-resident lender with a minimum average maturity periodA loan availed by Indian entities from domestic commercial banksQuestion 1 of 26 2. Which of the following is NOT a form of External Commercial Borrowings (ECBs)?Buyers' creditSuppliers' creditEquity investmentSecuritized instruments such as Floating Rate Notes and Fixed Rate BondsQuestion 2 of 26 3. What is one of the advantages of ECBs?High-interest rates compared to domestic fundsShorter-term availability compared to domestic fundsHigher borrowing restrictionsFunds are available for relatively long term and at lower interest rates compared to domestic fundsQuestion 3 of 26 4. What is the new borrowing limit under the automatic route for External Commercial Borrowings (ECB) set by the RBI?$500 million$750 million$1 billion$2 billionQuestion 4 of 26 5. Which of the following entities are now eligible beneficiaries for External Commercial Borrowings (ECB) under the new framework?Only large-scale manufacturing companiesOnly public sector enterprisesPort trusts, units in special economic zones (SEZ), micro-lenders, not-for-profit companies, registered societies/trusts/cooperatives, and non-government organizationsOnly banks and financial institutionsQuestion 5 of 26 6. What change has been made regarding the minimum average maturity period (MAMP) for all ECBs under the new framework?Reduced to 1 yearReduced to 2 yearsMaintained at 3 yearsIncreased to 5 yearsQuestion 6 of 26 7. What is included in the negative list for which the proceeds of ECB cannot be utilized?Real estate activities, investment in capital market, equity investmentWorking capital purposes, repayment of Rupee loansInvestment in infrastructure projectsAll of the aboveQuestion 7 of 26 8. What change did the RBI make regarding hedging norms for External Commercial Borrowings (ECB) in November 2018?Hedging norms were tightenedInfrastructure space companies are required to mandatorily hedge 100% of their ECB exposureA minimum tenor of five years for the financial hedge is requiredHedging norms were eased to make the ECB route attractive to firmsQuestion 8 of 26 9. What is the primary objective of the new External Commercial Borrowing (ECB) framework introduced by the Reserve Bank of India?To restrict the borrowing limit for Indian entitiesTo simplify the process of raising funds from non-resident lendersTo increase the minimum average maturity period for all ECBsTo impose stricter regulations on foreign borrowing activitiesQuestion 9 of 26 10. Which of the following entities are now allowed to borrow overseas under the new ECB framework?Only large corporations listed on the stock exchangeOnly government-owned enterprisesExport-Import Bank (EXIM) and Small Industries Development Bank of India (SIDBI)Only entities involved in real estate developmentQuestion 10 of 26 11. Which entity examines the cases for startups seeking to raise External Commercial Borrowings (ECB) under the automatic route?Reserve Bank of India (RBI)Authorised Dealer Category-II (AD Category-II) banksCentral GovernmentAuthorised Dealer Category-I (AD Category-I) banksQuestion 11 of 26 12. What is the primary criterion for eligibility to raise External Commercial Borrowings (ECB) under the automatic route for startups?Recognition as a Startup by the Central GovernmentMinimum average maturity period of 5 yearsBorrowing denominated only in Indian Rupees (INR)Lender must be a resident of a non-FATF compliant countryQuestion 12 of 26 13. What is the maximum borrowing limit per financial year for startups under the ECB facility?USD 5 millionUSD 2 millionUSD 3 millionUSD 1 millionQuestion 13 of 26 14. Which sector of companies may raise ECBs with a Minimum Average Maturity Period (MAMP) of 1 year for credit borrowing up to USD 50 million per financial year?Service sectorManufacturing sectorFinancial sectorAgricultural sectorQuestion 14 of 26 15. What is the Minimum Average Maturity Period (MAMP) for startups raising External Commercial Borrowings (ECB)?1 year3 years5 years10 yearsQuestion 15 of 26 16. What is the Minimum Average Maturity Period (MAMP) for External Commercial Borrowings (ECB) utilized for working capital or general corporate purposes?1 year3 years5 years10 yearsQuestion 16 of 26 17. What is a prerequisite for converting External Commercial Borrowing (ECB) into equity?Approval from the Reserve Bank of IndiaCompliance with sectoral capsConsent from the lenderNone of the aboveQuestion 17 of 26 18. In which scenario is compliance with prudential guidelines of RBI's Department of Banking Regulation necessary?If the ECB is raised from a foreign equity holderIf credit facilities are availed from the Indian banking systemIf the borrowing company's activity is not covered under automatic route of FDIIf the conversion involves additional cost to the borrowing companyQuestion 18 of 26 19. What is the primary requirement for conversion of ECB into equity under the Automatic Route of FDI?Approval from the Ministry of FinanceAdherence to sectoral capBorrowing company's activity covered under automatic route of FDIConsent from the borrowerQuestion 19 of 26 20. What must be strictly adhered to during the conversion process of ECB into equity?Sectoral capCompliance with prudential guidelinesPricing guidelinesLender's consentQuestion 20 of 26 21. What distinguishes Foreign Direct Investment (FDI) from Foreign Portfolio Investment (FPI)?FDI involves investment in equity instruments, while FPI involves investment in debt instruments.FDI is made by a Person Resident Outside India (PROI), while FPI is made by a Person Resident in India (PRI).FDI requires a minimum investment of 10% of the paid-up equity capital, while FPI involves less than 10% investment.FDI is repatriable, while FPI is non-repatriable.Question 21 of 26 22. What is the continuity rule regarding FDI in a listed Indian company?FDI can only be continued if the investment exceeds 10% of the paid-up equity capital.FDI is discontinued if the investment falls below 10% of the paid-up equity capital.FDI remains valid even if the investment falls below 10% of the paid-up equity capital.FDI continuity is determined by SEBI regulations.Question 22 of 26 23. How is the 10% limit applied in the context of Foreign Portfolio Investment (FPI)?Each investor group is limited to a maximum of 10% investment in a listed company.Each foreign portfolio investor is limited to a maximum of 10% investment in a listed company.Each individual investor is limited to a maximum of 10% investment in a listed company.The 10% limit does not apply to FPI investments.Question 23 of 26 24. What is the flexibility afforded to a Person Resident Outside India (PROI) regarding their investment in an Indian company?They can only invest through Foreign Direct Investment (FDI) channels.They can only invest through Foreign Portfolio Investment (FPI) channels.They can choose to invest either as FDI or FPI depending on their preferences.They are not allowed to invest in Indian companies.Question 24 of 26 25. Which of the following sectors is prohibited for foreign investment?Real estate developmentManufacturing of tobacco productsSoftware developmentRenewable energy projectsQuestion 25 of 26 26. Which of the following activities is prohibited in the real estate sector for foreign investment?Construction of commercial office spacesDevelopment of residential apartmentsConstruction of farmhousesInfrastructure projectsQuestion 26 of 26 Loading...
