Remember the time when India was under intense pressure on the international financial front in terms of the balance of payments problems. It was then that the country came of age and opened up itself to the rigours of commercial markets, not only to undo the potential of a sovereign collapse but also to reverse the trend. Those who remember the days in the beginning of the 1990s decade will not only be pleased but will also rejoice to note that where India borrowed extensively from the IMF once (even by pledging its gold reserve), now India has given a 10 billion USD loan to IMF such that the international body can wriggle out the developed countries from the financial crisis.
The Reserve Bank of India has entered into a 'Note Purchase Agreement' with the International Monetary Fund, to which the IMF website notes that "the agreement offers India a safe investment instrument at the same time as boosting the Fund’s capacity to help its members to weather the global financial crisis, and to facilitate an early recovery from the worldwide economic crisis." A factsheet on the IMF notes available on IMF website states that such agreements are meant for such IMF members which have their "external position sufficiently strong" and is thus reflective of the current position of India on the international financial front to show a marked change in the position in last two decades.
And for our law-buff readers, we would recommend having a look at the agreement which sets into perspective the international agreement conditioning and structuring.
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