Dubai Export Development Corporation (EDC) signed a Memorandum of Understanding with State Bank of India (SBI – DIFC Branch) to provide a framework for the provision of financial support and services to EDC members comprising of exporters and manufacturers in the UAE.
The three-year agreement provides a framework that permits EDC members to obtain value added financial services from SBI in the field of deposits, investments, corporate credit, loans & syndications, term loans & project finance, on a selective basis
Credit, being an essential ingredient for the success of any business, this agreement will facilitate credit to the exporters in the UAE at preferential and discounted terms. Such steps would greatly facilitate the task of the exporters, which will help in boosting the export segment of the UAE economy.
With an earlier similar arrangement for product certification with M/s Intertek and now with SBI on financial services, EDC is continuously looking for partnerships with service providers who are able to provide attractive and beneficial services that support the local exporters in the Emirates to establish innovative businesses and to develop customer export prospects.
India’s largest bank, State Bank of India located at Dubai International Financial Centre provides a full range of banking services, accepting deposits in non Dirham currencies (from non state markets) preferably USD, GBP and Euro for various periods as well as providing credits. Under the MoU, deposits made by EDC members’ will be selectively given a preferential pricing over SBI’s card rates.
“We share the same objective of enhancing the growth of the UAE economy with EDC. Through this partnership, SBI can grant trade finance and short-term working capital loans including letters of credit and bank guarantees, in addition to term loans, project finance and as well as syndication of credit requirements at highly competitive rates to EDC members,” said Mr. Vidyasagar, Chief Executive Officer, State Bank of India.
During the agreement, SBI’s facilities will be provided to EDC members such as overdraft, letters of credit (LC) comprising of issuance, advising, confirmation, negotiation and discounting, as well as issuance of bank guarantees. SBI also extends value added services such as discounts on the issuance and confirmation of LCs, handling charges and issuance of bank guarantees. Aside from being given priority in the processing of credit proposals, discounts may also be given to members on interest rates.
SBI’s term loans on corporate credit will be issued for various purposes such as augmentation of working capital, acquisition of plant and machinery, debt funding of new projects and expansion of existing projects. Meanwhile for project finance on corporate credit, there will be an assessment of fund based and non-fund based requirements of project funding through bilateral arrangements/ syndication. Under the MoU, EDC members are given priority in processing along with discount on interest normally charged for both the term loans and project finance.
State Bank of India is among the top 30 most reputable companies in the world according to Forbes. September 2009 SBI was granted a full banking licence from Dubai’s financial regulator.