India extended LoC to $862 million

India has extended a line of credit (LoC) of US Dollar one billion to Bangladesh for a range of projects in the railways, communications, infrastructure and other sectors, reports BSS.

Out of this amount, $200 million was converted to grant which has been fully disbursed to the government of Bangladesh, an Indian High Commission press release said here today.

Based on further negotiations, it said, New Delhi and Dhaka agreed to enhance the remaining credit line amount of $800 million to $862 million.

"This was done to cater for increase in expenditure of the Khulna-Mongla and the Kulaura-Shabazpur railway line projects," the release said.

EXIM Bank of India and the ERD of the Ministry of Finance, the government of Bangladesh, concluded all necessary formalities and inked the Second Amendatory Agreement raising the amount of the first credit line from $800 million to $862 million.

As many as 14 development projects are being implemented through the $1 billion loan, the biggest ever credit package by India.

On August 7 in 2010, Bangladesh and India signed the credit deal in Dhaka in the presence of the then Indian Finance Minister Pranab Mukherjee and Bangladesh Finance Minister Abul Maal Abdul Muhith.

Secretary of Economic Relations Division (ERD) M Musharraf Hossain Bhuiyan and Chairman and Managing Director of Exim Bank, India TCA, Ranganathan signed the deal on behalf of their respective sides.