Conformed Copy - L3856 - Financial Sector Development Project - Modermization and Institutional Development Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3857 IN Modernization and Institutional Development Loan Agreement (Financial Sector Development Project) between INDUSTRIAL DEVELOPMENT BANK OF INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated March 24, 1995 LOAN NUMBER 3857 IN LOAN AGREEMENT AGREEMENT, dated March 24, 1995, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) (the Borrower). WHEREAS (A) India (the Guarantor) and the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing of Part B of the Project; (B) by an agreement of even date herewith between the Guarantor and the Bank (the Modernization and Institutional Development Guarantee Agreement), the Guarantor is agreeing to guarantee the obligations of the Borrower in respect of the Loan and to undertake such other obligations as are set forth in the Modernization and Institutional Development Guarantee Agreement; (C) Part B of the Project will be carried out by the Reserve Bank of India (RBI) with the Borrower's assistance; (D) The Guarantor has requested the Bank to provide assistance towards the financing of Part A of the Project and by an agreement of even date herewith between the Guarantor and the Bank (Capital Restructuring Loan Agreement), the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to three hundred and fifty million dollars ($350,000,000) (the Capital Restructuring Loan); (E) the Borrower has requested the Bank to provide assistance towards the financing of Part C of the Project and by an agreement of even date herewith between the Borrower and the Bank (Backstop Facility Loan Agreement), the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to two hundred million dollars ($200,000,000) (the Backstop Facility Loan); Page 2 (F) by an agreement of even date herewith between the Guarantor and the Bank (the Backstop Facility Guarantee Agreement), the Guarantor has agreed to guarantee the obligations of the Borrower in respect of the Backstop Facility Loan and to undertake such other obligations as are set forth in the Backstop Facility Guarantee Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth or referred to in this Agreement, the Capital Restructuring Loan Agreement, the Modernization and Institutional Development Guarantee Agreement, the Backstop Facility Loan Agreement, the Backstop Facility Guarantee Agreement and the Project Agreement respectively; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) In Section 6.02, sub-paragraph (k) is re-lettered as sub-paragraph (l) and a new sub-paragraph (k) is added to read: "(k) An extraordinary situation shall have arisen under which any further withdrawals under the Loan would be inconsistent with the provisions of Article III, Section 3 of the Bank's Articles of Agreement". Section 1.02. Unless the context otherwise requires, the several terms defined in the Preamble to this Agreement, the General Conditions, the Capital Restructuring Loan Agreement and the Backstop Facility Loan Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the Project Agreement of even date herewith between the Bank and RBI for the Project; (b) "Participating Bank" or "PB" means (i) Allahabad Bank; (ii) Bank of India; (iii) Dena Bank; (iv) Indian Bank; (v) Indian Overseas Bank; and (vi) Syndicate Bank; and "Participating Banks" or "PBs" means all six Participating Banks; (c) "Allahabad Bank" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (d) "Bank of India" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (e) "Dena Bank" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (f) "Indian Bank" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (g) "Indian Overseas Bank" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (h) "Syndicate Bank" means the body corporate constituted under the Guarantor's Banking Companies (Acquisition Act), 1970; (i) "Performance Agreement" means an agreement between RBI and a PB, revised annually, in which performance targets for the PB are set out; (j) "Business Plan" means an annual Business Plan of a PB; (k) "Modernization and Institutional Development Subsidiary Loan Agreement" means an agreement between the Borrower and a PB to be entered into pursuant to Section 3.01(b) of this Agreement; (l) "Reserve Bank of India" or "RBI" means the Guarantor