EXIM Bank today signed Rupee-US$ Swap Agreement with Housing Development Finance Corporation Ltd. (HDFC) for US$40 mn. Under the Agreement, HDFC will pay US$40 mn to EXIM Bank out of the funds received from Asian Development Bank (ADB), Manila, amounting to US$ 100 mn under the housing finance facility guaranteed by Government of India. EXIM Bank will pay Rs.173 crores to HDFC.
The effective cost of dollar funds to EXIM Bank is 1% over LIBOR. On Rs.173 crores, EXIM Bank will receive from HDFC interest @ 12.5% semi-annually for the first 5 years. Thereafter, interest rate on Rupee funds will be reset for every 5-7 years at rate linked to yields on Government of India securities of comparable maturity. EXIM Bank will not assume any currency or interest rate risk as dollar funds will be on-lent by EXIM Bank in US$ for financing project exports from India..
In view of intense international competition, Indian project exporters need to offer low cost long term financing to secure contracts overseas. EXIM-HDFC Rupee-Dollar Swap provides a cost-effective source of long term dollar funds for EXIM Bank. The Bank will use these funds for structuring competitive financing packages to support project exports.
For further details, contact
Shri K. S. Gaikwad,