The Dynamics of External Commercial borrowings.After independence from British, India followed a restrictive economic policy, because the fear of foreign rule hadn’t left us. This led to an inefficient and underdeveloped economy. The changes in world business combined with the economic crisis of 1991 left the government no option but to bring in reforms to open up the economy. This woke up the Indian Organizations as there was a threat to them due to Multi-National Companies coming in and competing with them. The Indian Organizations started venturing into foreign markets in both equity and debt segments. External Commercial Borrowings are an important source of finance that are raised from Foreign markets. It has its pros and cons and since it affects the economy, it is controlled directly by the government. The ECBs for certain purposes/organizations have to be approved by the government, with many applications being rejected by the RBI. External Commercial Borrowings include a wide variety of financial instruments each with its own advantages, disadvantages and also different types of associated risks such as Interest Rate Risk, Exchange Rate Risk, etc. Organizations use one instrument or a combination of them according to their needs.Foreign Currency Convertible Bond CrisisIn the market progression time in the 1990s, Indian corporates required remote cash-flow to combine with the globalized showcase. The Indian Central Government and Central Bank — the Reserve Bank of India started off the cuff plans to allow External Commercial Borrowings (ECBs). In this paper, the creator concentrates on one such ECB instrument — Foreign Currency Convertible Bonds (FCCBs). The creator clarifies the ideas driving FCCBs, focal points and weaknesses for guarantors and speculators, the administrative structure and related tax assessment and reclamation approaches. In any case, when world markets were crushed by the financial downturn, Indian organizations did not remain totally protected. They had neither conceived a bearish market nor reclamation of their FCCBs. This problem was exacerbated when organizations couldn’t benefit their obligation. This paper examines this emergency and the arrangements that have been and could be turned to by organizations and gives an understanding into the measures taken by the Reserve Bank of India. Along these lines, it illustrates the present situation with cases from the Indian market to demonstrate how organizations are attempting to lighten themselves from such predicament. The creator at that point finishes up how the foolishness, mostly by the corporates and incompletely by controllers prompted such an emergency. This paper tries to make recommendations to bypass such a calamity once more.