India will extend new credit lines to developing countries from the corpus of India Development Initiative Fund.
It has been decided that new lines of credit to friendly developing nations would not ordinarily be extended, while any further releases of funds would be met through the corpus of IDIF, an official statement said in New Delhi.
However, the lines of credit already entered into or partially utilised may be allowed to continue till their completion.
The decision follows the implementation of the IDIF announced by Finance Minister Jaswant Singh in his Budget speech this year.
Presently, lines of credit worth $239 million in favour of Kyrghyzstan, Mauritius, Uzbekistan, Myanmar, Sri Lanka, Cambodia, Laos and Suriname are in progress, while Vietnam has a sanctioned line of credit worth Rs 1,070 million in operation.
The IDIF would also meet the demands of line of credit through funding of the interest differential in respect of credit to be managed and operated by Exim Bank of India.
This is being proposed to ensure proper and effective utilisation of the lines of credit through an organisation in a professional manner.