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Muhith: Easing of credit conditions will dominate discussions with Indian finance minister

  • Published at 05:19 pm October 3rd, 2017
  • Last updated at 01:25 am October 4th, 2017
Muhith: Easing of credit conditions will dominate discussions with Indian finance minister
Bangladesh Finance Minister AMA Muhith has said relaxing the terms and conditions for the third line of credit (LOC) will be the focal point of his discussions with his visiting Indian counterpart, Arun Jaitley. Muhith also said there would be no discussions on India extending its relief aid to help Bangladesh manage the growing refugee crisis in the southeast of the country. The minister gave the insights to reporters while waiting to receive the Indian finance minister at Air Force Base Bangabandhu in Dhaka’s Kurmitola on Tuesday. “There will be no discussions on funding the Rohingya relief (programmes) but we will explain our stance on this issue to the Indian minister,” Muhith said. The new Indian line of credit is worth a staggering $4.5 billion and will be used to fund 17 major projects in Bangladesh, of which most are for infrastructure development. The interest rate of the credit deal to be signed in Dhaka on Wednesday will be 1%, with a five-year grace period and a 0.5% commitment fee. Bangladesh will try to waive the 0.5% fee through its negotiations with the Indian finance minister. As per the proposal, at least 75% of the procurement for service-oriented projects and 65% for public works projects must be made from India. The new deal will also allow disbursement of the funds in 60 months at maximum after the contract tenure expires. In the existing agreements, the fund is to be disbursed in 48 months for the service sector and 72 months for others. Also under the new LOC, the Exim Bank of India will open a representative office in Dhaka for smooth implementation of the projects.