Tuesday, October 13, 2009

New World Bank loans to India

New loans to India are being made by the World Bank. 4.2 billion dollars will go to India for use in infrastructure, banking systems, and power.

From domain-b.com, we read more deatails of the newly signed loans.

The World Bank will provide total funding to the tune of $1.2 billion to IIFCL. Of this, $1.195 billion will come as long-term IBRD loan to finance infrastructure projects while $5 million will come as grant for capacity building of IIFCL.

The amount is expected to be disbursed by September 2015. IBRD loan is a variable spread loan based on six-monthly LIBOR. It will have a duration of 28 years and a grace of 7.5 years.

IBRD will also provide $2 billion as banking sector support loan, which is part of the series of measures to contain the slowdown and stimulate the economy by assisting public sector banks to keep credit flowing.

Keeping the growth momentum will help contain the adverse effects of the slowdown on employment and poverty, broaden financial inclusion and help production and trade sectors.

While India's banking sector is sound, stable and well regulated and the PSU banks are well capitalised with good asset quality and profitability, the government wants these banks to maintain credit expansion and help contain adverse effects of global slowdown.

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India is one of the three nations which are believe to have pulled the world economy along with China and Brazil. All sectors in India are showing good signs, but to continue this progress, a lots of funds are required I hope these funds will help India achieve what they have planned with this huge help from world bank.