India gets $3.2 b loan for PSU banks

Last Updated: Tue, Aug 25, 2009 02:19 hrs

The World Bank and India have concluded negotiations for loans worth $3.2 billion for recapitalising state-run banks and funding for the India Infrastructure Finance Company Ltd, a state-run lender to infrastructure projects.

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The World Bank board would meet in the second-half of September in Washington to approve a $2 billion loan for the recapitalisation of the PSU banks and another $1.2 billion loan for the IIFCL.

The Bank's External Affairs Advisor, Sudip Mazumdar, said "negotiations for the two loans have concluded. $2 billion loan for state-run banks and $1.2 billion loan for IIFCL would now be taken up for the board's approval."

The loans are expected to be formally signed in New Delhi within a month after the approval from the bank's board.

Both the loans form part of the $14 billion loan amount earmarked by the World Bank for India for three years, Mazumdar said.

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Also, there are other projects for which negotiations are going on between India and the World Bank.