India, Bangladesh sign USD 1 billion credit deal

Anisur Rahman
Dhaka, Aug 7 (PTI) In the largest-ever loan it has given
to any foreign country, India on Saturday signed an agreement
with Bangladesh to extend a USD 1 billion credit line to Dhaka
for developing 14 infrastructure projects, mostly in the
communications sector.
The loan agreement was signed between the Exim Bank of
India and the Economic Relations Department of Bangladesh in
the presence of visiting Indian Finance Minister Pranab
Mukherjee, who is the first high-profile Indian leader to
visit Bangladesh after Prime Minister Sheikh Hasina's trip to
New Delhi in January.
Under the deal, India would lend the amount, the biggest
it has offered to any foreign country, at a 1.75 per cent
interest rate with a repayment period of 20 years, including a
grace period of five years.
Bangladesh officials said the loan amount was the largest
the country has received under a single deal.
The line of credit will be used by Bangladesh for
developing its railway and other communication infrastructure,
besides power grid connectivity between Bangladesh and India
and establishment of state-run standards and testing institute
facilities.
The deal was inked in pursuance of the agreement reached
between Indian Prime Minister Manmohan Singh and Hasina during
her visit to New Delhi earlier in the year.
Economic Relations Department (ERD) Secretary M Musharraf
Hossain Bhuiyan and Exim Bank of India Chairman and Managing
Director T C A Ranganathan signed the deal in the presence of
Mukherjee and his Bangladeshi counterpart, Abul Maal Abdul
Muhith, at the state guest house of Jamuna.
Bangladesh rolled out the red carpet, usually reserved
for heads of states or governments, when Mukherjee arrived on
a scheduled four-hour visit, which was later extended by one
more hour.
A special Indian aircraft carried the influential leader
of India's ruling Congress-led government. His Bangladeshi
counterpart, Abul Maal Abdul Muhith, received him on the VVIP
tarmac of the airport.
Referring to the close bonds of friendship between the
two countries based on common heritage, historic, linguistic
and cultural ties, Mukherjee said soon after arrival, "We need
to continue to build on these commonalities and promote the
well-being of our people to greater economic engagements."
The Main Opposition Bangladesh Nationalist Party (BNP) of
ex-Prime Minister Khaleda Zia has criticised the agreement,
asserting that it is not in the national interest.
"The government is getting the loan from the Indian bank
with an interest rate seven times higher than that from any
multinational bank or donor agency," BNP said in a statement,
adding that it would eventually benefit India, while
Bangladeshis would have to repay the loan. PTI