India extends biggest ever LOC worth USD 2 billion to Bangladesh
Posted on: 10 Mar 2016 12:05:15
10 March 2016 Current Affairs: March 10,2016: India signed a landmark agreement with Bangladesh extending USD 2 billion to the country in its biggest ever overseas credit line, five years after it inked a credit agreement worth USD 1 billion with its neighbour. The USD 2 billion LOC (line of credit) is the biggest credit line India has so far extended to any country.The signing of the agreement is the manifestation of the friendship," Prime Minister Sheikh Hasina's principal secretary Abul Kalam Azad said at the signing ceremony. The signing ceremony Mesbahuddin said that 14 projects so far were planned to be implemented with the second Indian LOC covering power, railways, roads, transportation, information and communication technology, shipping, health and technical education sectors. A special focus on social sector cooperation pertaining to health and technical education aiming to further integrate economies of both countries and strengthen mutual cooperation. All the 15 projects under the First LOC have received financial concurrence of EXIM Bank of India. wo countries developed a functional joint mechanism in overseeing the implementation of the projects under the 2010 LOC and expected the arrangement to work for the second LOC.The Indian credit line bears an interest rate of 1 per cent to be re-payed in 20 years with a five-year grace period.Bangladesh's ERD in a statement said the "soft loan" committed under the second Indian LOC "will play a significant role in the socio-economic development of Bangladesh, which will be congenial for fostering the ongoing development partnership between the two countries". The first "Dollar Credit Line Agreement" for USD 1 billion was signed between the two countries in 2010 for developing infrastructure projects, mostly in the communications sector.
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