ICICI Bank Signs Pact With Korea Exim Bank

ICICI Bank inked an agreement with Export-Import Bank of Korea for a line of credit of $200 million. ICICI Bank would use the funds to meet the foreign currency requirements of corporates having business connections with Korean companies. These corporates could be Indian firms or those from neighbouring countries. This is the first time that Korea Exim Bank has extended such a line of credit to any bank. This two-step loan is not specifically tied to any sector and can be used across any sector. Sectors that are likely to benefit from this line of credit include consumer durables, automobile, power and shipping.

This facility would make it possible for ICICI Bank to give long-term loans, as it is a step-up loan having tenors of three years, 10 years and 14 years, the source said. The interest rates would be linked to tenors. The trade between India and Korea grew 40 per cent in the last two years, from $4.5 billion in 2004-05 to $6.3 billion in 2005-06. ICICI Bank had signed a similar arrangement for $200 million line of credit with Japan Bank for International Corporation a year ago. Out of this, $155 million has been drawn.