Startups Allowed to Raise $3 Million

IAS Prelims 2023

India has allowed start-ups to raise up to USD 3 million each in a fiscal year via the external commercial borrowings (ECB) route.

Overseas branches or subsidiaries of Indian banks will not be allowed to lend to start-ups via the ECB framework.

The RBI did not specify the maximum cost at which start-ups can raise money via ECB and said it will be mutually agreed between the borrower and the lender.

Typically, the central bank (RBI) specifies the maximum cost for financial institutions to raise money via ECB.