The Reserve Bank of India (RBI) announced on Wednesday that a $500 million (INR 48.50 billion) line of credit extended by the Indian government to the Maldives has been activated effective August 27.
Citing the RBI, Reuters reported that the activation of this credit line paves the way for signing disbursement agreements required for individual projects scheduled to be conducted under this facility.
The RBI stated that individual agreements worth at least INR 5 billion must be established for each project undertaken through this line of credit. The bank noted that these funds are earmarked for various developmental sectors within the Maldives.
Under the terms of the credit line agreement, at least 75 percent of the goods, labour, and services required for the financed projects must be sourced from Indian companies or suppliers. The remaining 25 percent of goods and services may be procured from countries outside of India.
The RBI further clarified that funds from this line of credit cannot be used to pay agency commissions related to export transactions. Such commissions must be settled using the exporters' own funds.
The Indian government agreed to provide this assistance through the Export-Import Bank of India (Exim Bank) in July last year to support various development projects. The agreement was finalised during President Mohamed Muizzu’s visit to India.
The previous administration was also granted an $800 million credit facility by India. However, that facility remained largely underutilised after the Gulhifalhu Port project was removed from its scope.






