New Delhi, April 19: The World Bank has said that it
is considering to raise the borrowing limit of individual
countries, an issue which was pressed by India at the G-20
meeting in London to increase flow of funds to developing
countries from the multilateral lending agency.
"Discussions are underway (for raising single borrower
limit) but a decision has not been made," a World Bank
spokesperson said.
At present, a country can borrow up to 15.5 billion
dollar as per the SBL (single borrower limit) fixed by the
Bank.
Raising the issue at the G-20 London meeting, India
urged the Bank to raise the SBL to fill the funding gap
created in developing economies by the withdrawal of private
capital flows from rich nations.
The increase in borrower limit, India argued, was
necessary to help the developing countries pump in more funds
in infrastructure sector and fight the impact of global
financial meltdown.
The SBL issue, according to the Bank, is addressed by the
Board of Directors as part of the annual income review
exercise.
India, the official sources said, also underlined the
need for expeditious clearance of projects by the Bank to
increase flow of funds into the infrastructure sector
projects.
Refinancing of bank lending for infrastructure projects
is another way of lubricating investment in infrastructure,
sources said, adding "a critical issue here is the need to
avoid prolonged project approval methods which otherwise
delays financing."
The Bank can also play a critical role in encouraging the
developing countries to undertake countercyclical measures to
boost economic growth.
Prime Minister Manmohan Singh, earlier in the month, had
called for providing additional funding to developing nations
as a way to maintain demand in a troubled global economy.
"We must ensure that countries hurt by the massive
withdrawal of private capital that has taken place, which is
unlikely to be reversed in 2010, are able to rely upon an
increased flow of resources from the international financial
institutions," he had said ahead of the G-20 London Summit.
Singh was of the view that multilateral development banks
can also play a key role in maintaining flow of resources to
developing countries over the next two years.
Bureau Report
