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Home Around South Asia

India relaxes conditions for loans given to Bangladesh

Editor by Editor
April 24, 2017
in Around South Asia, Bangladesh, Business, India, Top Story
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Kolakata, April 24 (www.bdnews24.com): With the latest credit of $4.5 billion in 2017, India offered total of $7.5 billion loan to Bangladesh in last few years on their own terms. After fruitful discussion between Bangladesh Finance minister AMA Muhith and his counterpart Arun Jaitley on the sidelines of the Spring Meeting of the World Bank Group – IMF, India agreed to relax the loan conditions.

Disclosing this Bangladesh Finance Minister AMA Muhith said this credit would play a ‘major’ role in Bangladesh’s development.

He also said that India’s latest credit to Bangladesh is more than that the ADB pledges to Bangladesh.

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Earlier, Bangladesh had to purchase from India with 75 percent of the credit, but now the amount has been cut to 65 percent, which means Bangladesh can use 35 percent of the credit of its own choice.

In the first phase of the line of credit from India, Bangladesh received $1 billion with 1.7 percent interest.

Subsequently India cut the rate to 1 percent in the second phase when it gave Bangladesh $2 billion during Prime Minister Narendra Modi’s Dhaka visit in 2015.

The rate remained unchanged when the two countries signed $4.5 billion credit deals during Prime Minister Sheikh Hasina’s recent visit to India.

Bangladesh’s Economic Relations Divisions Secretary Shofiqul Azam, who was also present in Muhith’s meeting with Jaitley, said eight of the projects taken with the first phase of Indian line of credit had been completed. The remaining seven are in their final stages.

With the second phase of Indian credit of $2 billion , the 14 projects were initiated, said Azam.

He also informed that the latest Indian credit of $4.5 billion will be used in 17 projects that have been finalised.

At the meeting with Muhith, the India Finance Minister Arun Jaitley expressed satisfaction over Hasina’s visit to India and said “All the agreements will be implemented very soon.”

Muhith quoted Jaitley,  “The relation between the two countries is very good now. Only the water sharing of Teesta river issue has remained unsettled. Our prime minister (Modi) has said it would also be resolved. And I am also saying it will be resolved soon.”

Jaitley informed Muhith that “Decision will be taken after discussing the issue with the West Bengal government soon.”

During Hasina’s visit, India Prime Minister Narendra Modi promised an ‘early solution’ to the Teesta water sharing  issue.

(The featured picture at the top shows A.M.A.Muhith, Finance Minister of Bangladesh)

 

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