India is planning to provide a guarantee of about 90 per cent on loans up to ₹100 crore ($10.75 million) to lenders in case borrowers default in the aftermath of the crisis in West Asia, both the sources said.
New Delhi:The government plans to roll out sovereign credit guarantees on loans worth $26.7 billion, aimed at supporting businesses, particularly small firms, affected by West Asia crisis, two government sources said.
Businesses, such as textile and glass makers, have been hit by disruptions to supply from West Asia due to the US-Israeli war with Iran. At the same time India, the world’s third-largest oil importer, also faces the risk of rising inflation and slower growth.
The government is planning sovereign guarantees for four years to banks that lend to businesses, similar to those provided during the deadly Covid-19 pandemic, both the sources said. This would cost the government about ₹17,000 to ₹18,000 crore ($1.83 billion to $1.94 billion), they said.
India is planning to provide a guarantee of about 90 per cent on loans up to ₹100 crore ($10.75 million) to lenders in case borrowers default in the aftermath of the crisis in West Asia, both the sources said.
In 2020, India offered credit guarantees to support bank lending to businesses, including travel and tourism firms hit hardest by the Covid-19 pandemic, to help them resume operations and pay their debts.
Reuters