Banking Exams Exam > Banking Exams Questions > Indian companies are allowed to arrange funds...
Start Learning for Free
Indian companies are allowed to arrange funds from sources abroad through which of the following means?
(A) External Commercial Borrowings
(B) Foreign Currency Convertible Bonds
(C) Preference Shares
(A) External Commercial Borrowings
(B) Foreign Currency Convertible Bonds
(C) Preference Shares
- a)Only A
- b)Only B
- c)Only C
- d)Only A and C
- e)All A, B and C
Correct answer is option 'E'. Can you explain this answer?
Most Upvoted Answer
Indian companies are allowed to arrange funds from sources abroad thro...
Indian companies are allowed to arrange funds from sources abroad through the following means:
(A) External Commercial Borrowings (ECBs)
(B) Foreign Currency Convertible Bonds (FCCBs)
(C) Preference Shares
1. External Commercial Borrowings (ECBs):
- Indian companies are allowed to borrow funds from foreign sources through ECBs.
- ECBs refer to commercial loans in the form of bank loans, buyers' credit, suppliers' credit, securitized instruments, etc.
- These borrowings can be in the form of either foreign currency loans or rupee-denominated loans.
- ECBs are subject to certain conditions and regulations set by the Reserve Bank of India (RBI).
2. Foreign Currency Convertible Bonds (FCCBs):
- FCCBs are a type of bond issued by an Indian company in a foreign currency, usually in US dollars or euros.
- These bonds can be converted into equity shares of the issuing company at a predetermined conversion price.
- FCCBs provide an opportunity for Indian companies to raise funds from foreign investors and also have the potential for equity dilution if the bonds are converted into shares.
3. Preference Shares:
- Indian companies can also raise funds from foreign sources through the issuance of preference shares.
- Preference shares are a type of equity security that gives the shareholders preferential treatment in terms of dividend payments and distribution of assets in the event of liquidation.
- Foreign investors can invest in Indian companies by subscribing to preference shares, thereby providing additional capital to the company.
In summary, Indian companies have the option to arrange funds from sources abroad through External Commercial Borrowings (ECBs), Foreign Currency Convertible Bonds (FCCBs), and Preference Shares. These avenues allow companies to access foreign capital and diversify their sources of funding. However, it is important to note that these funding options are subject to regulatory guidelines and conditions set by the Reserve Bank of India.
(A) External Commercial Borrowings (ECBs)
(B) Foreign Currency Convertible Bonds (FCCBs)
(C) Preference Shares
1. External Commercial Borrowings (ECBs):
- Indian companies are allowed to borrow funds from foreign sources through ECBs.
- ECBs refer to commercial loans in the form of bank loans, buyers' credit, suppliers' credit, securitized instruments, etc.
- These borrowings can be in the form of either foreign currency loans or rupee-denominated loans.
- ECBs are subject to certain conditions and regulations set by the Reserve Bank of India (RBI).
2. Foreign Currency Convertible Bonds (FCCBs):
- FCCBs are a type of bond issued by an Indian company in a foreign currency, usually in US dollars or euros.
- These bonds can be converted into equity shares of the issuing company at a predetermined conversion price.
- FCCBs provide an opportunity for Indian companies to raise funds from foreign investors and also have the potential for equity dilution if the bonds are converted into shares.
3. Preference Shares:
- Indian companies can also raise funds from foreign sources through the issuance of preference shares.
- Preference shares are a type of equity security that gives the shareholders preferential treatment in terms of dividend payments and distribution of assets in the event of liquidation.
- Foreign investors can invest in Indian companies by subscribing to preference shares, thereby providing additional capital to the company.
In summary, Indian companies have the option to arrange funds from sources abroad through External Commercial Borrowings (ECBs), Foreign Currency Convertible Bonds (FCCBs), and Preference Shares. These avenues allow companies to access foreign capital and diversify their sources of funding. However, it is important to note that these funding options are subject to regulatory guidelines and conditions set by the Reserve Bank of India.
Free Test
FREE
| Start Free Test |
Community Answer
Indian companies are allowed to arrange funds from sources abroad thro...
- Any money that has been borrowed from foreign sources for financing the commercial activities in India are called External Commercial Borrowings.
- The Government of India permits ECBs as a source of finance for Indian Corporates for expansion of existing capacity as well as for fresh investment.
- FCCB is the money being raised by the issuing company is in the form of a foreign currency, and Indian companies are allowed to do this.
- Preference share is to raise money using shares. It is also allowed to raise money.
|
Explore Courses for Banking Exams exam
|
|
Similar Banking Exams Doubts
Top Courses for Banking ExamsView all
Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer?
Question Description
Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer?.
Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer?.
Solutions for Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? in English & in Hindi are available as part of our courses for Banking Exams.
Download more important topics, notes, lectures and mock test series for Banking Exams Exam by signing up for free.
Here you can find the meaning of Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer?, a detailed solution for Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? has been provided alongside types of Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Indian companies are allowed to arrange funds from sources abroad through which of the following means?(A) External Commercial Borrowings(B) Foreign Currency Convertible Bonds(C) Preference Sharesa)Only Ab)Only Bc)Only Cd)Only A and Ce)All A, B and CCorrect answer is option 'E'. Can you explain this answer? tests, examples and also practice Banking Exams tests.
|
|
Explore Courses for Banking Exams exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup