Rule 278 — GFR

Rule 278 Borrowings from multilateral agencies by Central Public Sector Undertakings.

(i) All borrowings from the multilateral agencies by Central Public Sector Undertakings would be direct (without Government of India’s intermediation) on the terms as agreed mutually between the borrower and the lender and approved by the Government of India. However, where such terms involve guarantee of Government of India, prior approval of the Budget Division of the Ministry of Finance may be obtained.

(ii) The borrowing should relate to the Projects approved by the prescribed competent authority of the Central Government.

(iii) Wherever guarantee is to be given by Government of India, the borrower shall enter into an agreement with the Government of India for the payment of guarantee fee on the principal amount of the loan drawn and loan outstanding from time to time.

(iv) The Government of India Guarantee would only cover the principal amount and the normal interest. All other risks including the exchange rate risk would be shared between the borrower and lender as per terms and conditions prescribed in the loan agreement.