MOVE
TO RESOLVE LIQUIDITY PROBLEMS OF PROJECT EXPORTERS IN IRAQ - PRESS
NOTE
The government has cleared the proposal
of the Ministry of Commerce and Industry, to resolve the liquidity
problems of such of the project exporters as had executed projects
in Iraq on deferred payment basis ab-initio, but were outside
the ambit of Deferred Payment Agreement signed between the governments
of India and Iraq. Their dues remain non-realised from Iraq.
As a result, they were not in a position to service the loans
taken by them from Exim Bank and other commercial banks against
construction work policies and counter-guarantees given by the
Ministry of Railways even in one of the cases. Accordingly, their
debts/liabilities have been declared as Non-Performing Assets
(NPAs) by the lending banks/financial institutions.
The Reserve Bank of India
(RBI) would now be issuing seven-year bonds to cover these outstanding
dues and these bonds would be guaranteed by the Government of
India. Keeping in view the Iraq situation, it is expected that
the proposed move would accelerate the project exports which have
been adversely affected over the years and the chances of securing
overseas projects by Indian companies would be bright. At the
same time, it will also help the lending banks/Fis to wipe out/reduce
their NPAs.
