In view of its strong balance of payments and comfortable foreign exchange reserves position, India has been selected for the first time by the International Monetary Fund to become a member of its Financial Transaction Plan.

Accordingly, India has contributed $205 million to the FTP, thus turning from a debtor into a creditor to the IMF.

The decision to select India as a member of the FTP from the September-November 2002 quarter sends a strong signal of the country's strength and the resilience of its external sector to the international community, an RBI release said in Mumbai on Saturday.

The IMF selects countries with strong BoP and foreign exchange reserves position for contributing to the FTP, it said, adding these countries help the IMF finance the balance of payments needs of other countries.

Referring to India, RBI said the first transfer of special drawing rights of $5 million was effected on May seven, followed by $200 million on June 17, 2003.

To effect these transfers to the IMF, the government bought equivalent foreign exchange ($6.96 million and $284.21 million) from the RBI on those dates from its foreign currency reserves.

Foreign assets held in the form of reserve tranche position were akin to other components of forex reserves and were given a rate of return by the IMF, it said, adding they can also be used by India, when required, to deal with any BoP needs entirely at India's discretion.