Exim Bank to provide line of credit to Bangladesh, Sri Lanka

The Export-Import Bank of India (Exim Bank) has entered into an agreement with Bangladesh for providing a $1 billion line of credit for financing exports and consultancy services for projects in the neighbouring South Asian country.

The credit agreement under the line of credit (LoC) is effective from February 1, 2011, and the date of execution of agreement is August 7, 2010.

"Exim Bank has concluded an agreement dated August 7, 2010, with the government of Bangladesh making available to the latter a LOC of $1 billion for financing eligible goods and services, including project exports and consultancy services in Bangladesh," the Reserve Bank said in a statement.

The goods and services, including consultancy services from India for exports under this agreement are those which are eligible for export under the foreign trade policy of the Indian government.

Out of the total credit under this agreement, the goods and services including consultancy services of the value of at least 85% of the contract price shall be supplied by the seller from India.

Meanwhile, Exim Bank has also entered into an agreement with Sri Lanka to provide LoC worth $416.39 million for three infrastructure projects.

The credit agreement with the island nation is effective from January 24, 2011 and the date of execution of the agreement is November 26, 2010, another statement from the RBI said.

It involves funding railway track laying projects on the Omanthai-Pallai sector, the Madhu Church-Tallaimannar sector and the Medawachchiya-Madhu railway line.