Sunday, August 8, 2010

Indian credit terms 'good': Bangladesh

Bangladesh finance minister AMA Muhith on Sunday described as "good" the terms of the $1 billion credit India has offered as the two neighbours reviewed the growing economic and security cooperation during finance minister Pranab Mukherjee's visit here.

Muhith rejected opposition criticism that the Indian terms were higher than the World Bank and the Asian Development Bank, saying in the past Bangladesh had paid as high as five per cent for foreign loans for 15 years.

The loan agreement between India's Exim Bank and Bangladesh's Economic Relations Division was signed on Saturday in the presence of Mukherjee.

Muhith said the interest rate is 1.75 per cent and commitment charge is 0.5 per cent and wondered how the opposition could make such an allegation. "This is utterly false," The Daily Star quoted him as saying.

The opposition Bangladesh Nationalist Party had said the government was getting the loan from India with an interest rate seven times higher than that from any multinational bank or donor agency.

The loan is the biggest ever credit package by India to any nation. It is also the single largest loan to Bangladesh from any nation, development bank or donor agency.

The credit will finance 14 development projects of Bangladesh. The projects mostly relate to development of railways and other communication infrastructure in Bangladesh, particularly to facilitate transshipment of Indian goods to its northeastern region through Bangladesh.

During Sheikh Hasina's visit to New Delhi in January this year, Bangladesh had agreed to allow India using the Chittagong port, while Delhi had agreed on giving transit facilities to Bhutan and Nepal for increasing connectivity, trade and investment.

Mukherjee said India would earmark the non-tariff barriers and remove the obstruction for Bangladeshi products to access the Indian market.

Muhith said border markets will start functioning soon.

Mukherjee's visit was the first visit by a key Indian leader since Sheikh Hasina's trip to New Delhi. He met Prime Minister Sheikh Hasina and discussed a wide of range of bilateral issues.

These included a quick implementation of the joint declaration of the two countries on Dahagram and Angarpota enclaves, food procurement, and increasing regional connectivity involving Nepal and Bhutan, The Daily Star quoted Abul Kalam Azad, the premier's press secretary, as saying.

Mukherjee also held talks with foreign minister Dipu Moni and reviewed the implementation of the agreements reached between the two countries.


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