IFC to give $25 mn to Federal Bank

International Finance Corporation (IFC), a member of the World Bank Group, will provide trade financing of up to $25 million (around Rs 115 crore) to Federal Bank to enhance its support to small and medium enterprises and help boost international trade opportunities.

IFC’s trade finance facility will provide Federal Bank with risk coverage and access to a global network that will help grow the bank’s trade finance business. According to IFC the network facilitates transactions in challenging markets, promotes competitive financing, and builds banking relationships with new institutions, thereby reducing risk and enabling more smaller businesses to engage in trade.

Federal Bank Executive Director P C John said: “The trade facility from our long-term partner, IFC, will improve Federal’s ability to support smaller businesses by offering short-term foreign-currency trade finance products.” Federal Bank is the second Indian bank supported under IFC’s Global Trade Finance Programme, following Kotak Mahindra Bank.

“IFC’s trade finance support to Federal Bank reflects our commitment to help the corporate and smaller business sectors increase their share of global trade by expanding the availability of trade finance,” said Paolo M Martelli, IFC’s regional director for South Asia.