SBI, K-EXIM sign $500 million line of credit

To fund Korean companies for setting up production base in India, the State Bank of India (SBI) and the Export-Import Bank of Korea (K-EXIM) signed a $500 million line of credit here on Wednesday.

The agreement was signed by SBI chairperson Arundhati Bhattacharya and Lee Duk-hoon, K-EXIM chairman and president, the SBI said in a statement.

"This Line of Credit will help SBI in arranging long-term foreign currency funds to finance Korean Companies setting up manufacturing unit or Indian corporates sourcing goods from joint ventures or subsidiaries of Korean companies having manufacturing set up in India which will be a push to the mission," Bhattacharya was quoted as saying in the statement.

"We will provide the fullest possible financial support to Korean and Indian companies for the successful cooperative partnership," said Lee.

According to the SBI, line of credit can be utilised for financing corporates in India or neighbouring countries to purchase goods which are of Korean origin or manufacture and hire services rendered by Korean person.

The line of credit can also be utilised to finance clients of SBI having business relationships either by way of equity participation or regular trade with Korean companies globally, as well as joint ventures or subsidiaries of Korean companies.

The loan shall have a maturity of maximum 15 years. With the signing of this Line of credit, the total facility from K-EXIM for SBI will be $1 billion.