WBCS.LIVE practice question

In the Balance of Payments (BoP), 'External Commercial Borrowings' (ECB) are recorded in?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Current Account
  2. Trade Account
  3. Visible Account
  4. Capital Account

Correct answer and explanation

Correct answer: Capital Account

Explanation: ✅ Correct Answer: D) Capital Account 📚 Explanation: The Capital Account of the BoP records all international transactions that involve the transfer of ownership of assets, including borrowings and investments. External Commercial Borrowings (ECBs) are loans taken by Indian entities from non-resident lenders. Other components of the Capital Account include Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI).