As multilateral lending agency IMF may need more funds to help countries facing a sovereign debt crisis in Europe, India plans to pledge additional
support of USD 4 billion to the fund.
This would increase India's total commitment to the IMF to USD 14 billion, as it had already pledged USD 10 billion in March this year for countries facing a financial crisis.
"India is likely to contribute up to USD 14 billion to the IMF," a senior India's Finance Ministry official said.
In March this year, India participated in the fund's note purchase agreement (NPA) to the extent of USD 10 billion. This means India has committed to provide this amount when the IMF
demands it.
Of the USD 10 billion commitment, the Reserve Bank of India (RBI) has already contributed a small portion to the IMF from its foreign exchange reserves as asked by the fund.
The government is now considering to commit a total support of USD 14 billion under IMF's new arrangements to borrow (NAB), which means an additional USD 4 billion of assurance.
"Our contribution to NPA will fold into NAB, so the total will not exceed USD 14 billion... The recent crisis in Greece has raised the fund requirement of the IMF," the official
said.
India has not taken any financial support from the IMF since 1991, when the country had to pledge gold for an IMF loan due to a serious balance of payments problem.
"We have been fulfilling our responsibilities at the IMF as a responsible nation in the global community without using
the privileges. Even India's buying of gold signalled we are a different country today," the official said.
In November last year, the country bought 200 tonnes of gold from the IMF for USD 6.7 billion.
Under the NPA, the IMF gets assurances for a certain amount of funds from different countries who agree to purchase the fund's notes as and when the multilateral lending agency
requires funds to provide to countries facing balance of payments difficulties.