In Today’s News:
- India and Maldives-pact for $400 million connectivity in Male.
1.India and Maldives – pact for $400 million connectivity in Male
News Summary
The EXIM Bank of India and the Ministry of Finance of Maldives signed an agreement for $400 million in Male for Greater Male Connectivity Project(GMCP). Besides this India has also promised to provide a grant of $100 million to the initiative. This Line of Credit(LoC) and Grant is in addition to the previously sanctioned LoC of $800 million.
Prelims GS – Economic Development
EXIM Bank of India:
- Export-Import Bank of India (EXIM Bank) is a specialized financial institution, wholly owned by the Government of India, set up in 1982, for financing, facilitating, and promoting foreign trade of India.
- EXIM Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments, and other entities overseas, to enable buyers in those countries to import developmental and infrastructure projects, equipment, goods, and services from India, on deferred credit terms.
Line of Credit:(LoC)
- A line of credit (LOC) is a preset borrowing limit that can be used at any time.
- The borrower can take money out as needed until the limit is reached.
- A LOC is an arrangement between a financial institution and a client that establishes the maximum loan amount the customer can borrow.
- The borrower can access funds from the line of credit at any time as long as they do not exceed the maximum amount (or credit limit) set in the agreement and meet any other requirements such as making timely minimum payments.