Government of India's consent to enter into the Special Private Placement Bonds arrangement with International Bank for Reconstruction and Development

The Union Cabinet today gave its approval for entering into Special Private Placement Bonds (SPPBs) arrangement with International Bank for Reconstruction and Development (IBRD) (part of World Bank Group) for enabling India to have additional borrowing space of US $ 4.3 billion above the Single Borrower Limit (SBL), RBI would invest in SPPBs of the IBRD. The IBRD would be able to lend to India US$ 4.3 billion above the Single Borrower Limit of US$ 17.5 billion, i. e. up to US$ 21.8 billion.

The Cabinet also approved the Government of lndia signing the following Agreement/Memorandum of Understanding:-

a) Framework Agreement between Government of lndia and the IBRD.

b) Memorandum of Understanding between Government of lndia and the RBI.

The investment by the RBI is to ameliorate the concentration risk policy of the IBRD loans to India. The same terms and conditions that is generally applicable for IBRD loans to all clients, including India, will be applicable for the loans above the SBL.

The additional borrowing space will enable Government of India to commit new projects with World Bank (IBRD) assistance. Government of India gives preference to projects in low income and special category States, as well as to projects aimed at fostering inclusive growth.

The proposal will enable leveraging World Bank’s knowledge base and global reach for transfer of knowledge, adoption of good practices, reforms of processes and systems and capacity building.