India provided USD 500 million Line of Credit to Bangladesh

On 11 April 2019, the Exim Bank signed an agreement with Bangladesh's Armed Forces Division. The agreement was to provide India-supported line of credit (LoC) $500 million to Bangladesh.
Vamsi Athreya

Updated: Dec 08,2019 09:00:08 am

India provided USD 500 million Line of Credit to Bangladesh

08 December 2019 Current Affairs:India provided a $500 million Line of Credit (LoC) to Bangladesh on 5 December. The funding is for defenCe-related procurement in Bangladesh. 

Soft loan facility agreement:
♦ RBI said that under the soft loan facility, financing of export of eligible goods and services from India would be allowed subject to the Foreign Trade Policy.
♦ Under the agreement, out of the total credit by Exim Bank, the goods and services of the value of at least 75% of the contract price shall be supplied by the seller from India. The rest 25% of goods and services can be procured by the seller for the purpose of the eligible contract from outside India, including Bangladesh.
♦ But the eligible goods and services supplied by the seller from India can be reduced from 75% to 65% based on the nature of the procurement and further reduction may be considered on a case-to-case basis.

EXIM Bank's agreement with Bangladesh:
On 11 April 2019, the Exim Bank signed an agreement with Bangladesh's Armed Forces Division. The agreement was to provide India-supported line of credit (LoC) $500 million to Bangladesh. The agreement under the LoC came to effect from 7 November 2019.
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