The International Finance Corporation (IFC), the investment arm of the World Bank, is planning to lend $100 million to private-sector bank Federal Bank Ltd. (FBL) in India.
The $100 million will come as a senior loan offered by the IFC as long-term funding to the bank’s International Financial Services Centre Branch (IFSCB) in Gujarat International Finance Tec-City (GIFT City), Gujarat.
The funding will help FBL's clients to grow their business and while supporting the GIFT City initiative.
GIFT City will be India’s first international financial service centre with conducive multi-service SEZ and an exclusive domestic zone. It is aiming to be a hub for IT companies, finance companies, commodity exchange, global trading, insurance, offshore banking and data centres. The GIFT city initiative of the government is expected to create 500,000 jobs by 2020.
“The project will support in growing / expanding Indian businesses across different regions, including Africa, Asia, etc. and promote regional trade and investment,” said IFC in a statement. The success of GIFT City is expected to promote cross border trade and investment while deepening the integration of the Indian economy with the global economy.
FBL is one of IFC’s existing clients where the IFC provided a trade financing of up to $25 million to enhance its support to small and medium enterprises in 2010.
The bank has a dominant presence in the state of Kerala and has a strong franchise amongst non-resident Indians (NRIs). It has a network of 1,252 branches and 1,665 ATM's spread across 29 states and union territories in India.