NHAI signs MoU with SBI for a Long Term Unsecured Loan of Rs 25000 Crore

Aug 3, 2018 15:16 IST
NHAI signs MoU with SBI for a Long Term Unsecured Loan of Rs 25000 Crore

The National Highways Authority of India (NHAI) on August 3, 2018 signed a Memorandum of Understanding (MoU) with the State Bank of India (SBI) for getting Long Term Unsecured Loan of Rs 25000 crore for 10 years with 3 years of moratorium on repayments.

This is the SBI’s highest long term unsecured loan to any entity. Moreover, this is the largest amount of loan to have been sanctioned to NHAI in one stroke by any institution.

SBI offered the loan to the NHAI in response to the Expression of Interest invited by the latter from Scheduled Commercial Banks to fund Rs 25000 Crore as an unsecured loan for 10 years with 3 years of moratorium on repayments

Highlights of the MoU

• The total sanctioned amount of Rs 25000 Crore will be disbursed by March 31, 2019.

• The Rate of interest would be based on one month Marginal Cost of Funds Based Lending Rate (MCLR).

• Interest accrued on the amount actually outstanding will be paid on monthly basis.

• NHAI can draw the amount in any number of tranches by March 31, 2019.

• The loan sanctioned is unsecured; there is no principal repayment liability for initial three years.

• After three years, the repayment would be done in 14 equal half yearly instalments.

• The total loan tenure is 10 years.

• NHAI can repay or prepay the loan at any time without any prepayment penalty.

• The repayment would be made by NHAI in 14 equal half yearly instalments after the three-year moratorium is over.

National Highways

National Highways are the arterial roads of the country for inter-state movement of passengers and goods. They cross the length and width of the country connecting the National and State capitals, major ports and rail junctions and link up with border roads and foreign highways.

The total length of NH (including expressways) in the country at present is 100087.08 kms. While Highways/Expressways constitute only about 1.7 percent of the length of all roads, they carry about 40 percent of the road traffic.

About National Highways Authority of India

• The National Highways Authority of India was set up by NHAI Act, 1988 that provides for the constitution of an Authority for the development, maintenance and management of national highways and for matter connected therewith.

• It has been entrusted with National Highways Development Project which has vested 50329 kms of National Highways for development, maintenance and management.

• It works to ensure that all contract awards and procurements conform to the best industry practices with regard to transparency of process.


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