India extends biggest ever LOC worth USD 2 billion to B'desh

India today 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," said an Indian High Commission statement here as chairman and managing director of Exim Bank Yaduvendra Mathur signed the deal with senior secretary in Bangladesh's Economic Relations Division Mohammad Mesbahuddin.

The agreement was inked in line with Prime Minister Narendra Modi's announcement during his visit here in June, 2015 while Bangladeshi officials familiar with the process said this credit would be used in a wider range of areas including the social sector while the previous 2010 credit line was mostly concentrated on communication infrastructure.

"Bangladesh-India friendship now reached at its peak but we want to set it to a higher trajectory. 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.

Bangladesh foreign secretary Shahidul Haque and Indian High Commissioner in Dhaka Harsh Vardhan Shringla, among others, witnessed the ceremony at the National Economic Council complex.

In a media briefing following 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.

He said apart from infrastructure projects, 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. Seven of the total 15 projects have been completed and the rest are at various stages of implementation," the Indian High Commission statement said.

The Indian envoy said the two 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 as well.