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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