India announces Rs.250 bn package to improve liquidity

October 15th, 2008 - 7:21 pm ICT by IANS  

New Delhi, Oct 15 (IANS) In a bid to release more funds for credit-starved industry, Finance Minister P. Chidambaram Wednesday announced a Rs.250 billion (Rs 25,000 crores/$5.5 billion) package for lending institutions and doubled the overseas borrowing limit for the corporate sector to $6 billion.“Our banks are well capitalised. There is no reason to fear,” Chidambaram told reporters here, while adding that the National Bank for Agriculture and Rural Development (Nabard) will get Rs.175 billion, while the rest will go to banks.

The amount was being issued against the waiver of farm loans worth an estimated Rs.710 billion to bail out nearly four million small and marginal farmers across the country, he said.

He said the earlier limit on external commercial borrowings (ECB), which helps the corporate sector to access the financial markets overseas, was also being doubled to $6 billion.

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