India extends $500-mn credit to Sri Lanka
Part of: Prelims and GS-II International Relations and GS-III Economy
Context: India has extended a $500-million Line of Credit (LOC) to Sri Lanka for urgent fuel imports, just days after providing $900 million relief to Sri Lanka, which is facing one of its worst economic downturns.
What is Line of Credit?
- It is a credit facility extended by a bank or any other financial institution to a government, business or an individual customer, that enables the customer to draw the maximum loan amount.
- The borrower can access funds from the line of credit at any time as long as they do not exceed the maximum amount (or credit limit) set in the agreement and meet any other requirements such as making timely minimum payments.
News Source: TH