Railways and Life Insurance Corporation (LIC) have signed a memorandum of understanding (MOU) to aid the financing of Railway Projects in the country.
Under the MoU, the LIC will make available to the Ministry of Railways/its entities a financial assistance of upto ₹ 1,50,000 crore over the next five years for implementing Railway projects.
Under this financing facility, there would be a five year moratorium on interest and loan repayment and the rate would be linked to 10-year benchmark (G-Sec yield) plus 10 basis points.
The financial assistance will be available from the financial year 2015-16, according to the MoU.
This historic MoU was signed by Rajalakshmi Ravikumar, Financial Commissioner, Ministry of Railways and S.K.Roy, Chairman, LIC here on Wednesday in the presence of Finance Minister Arun Jaitley and Railways Minister Suresh Prabhu.
This MoU would help Railways fund part of the total Plan budget of ₹ 10,011 crore for the financial year 2015-16.