Under the arrangement, RMBA can make withdrawals of US dollar, euro and rupee in multiple tranches of up to a maximum of USD 100 million or its equivalent, RBI said in a release.
This is expected to further economic co-operation between the two countries, it added.
The agreement is valid for three years from the date of signing.
RBI also offers an aggregate amount of USD 2 billion both in foreign currency (USD and euro) and rupee to SAARC member countries -- Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
It is also offered to take care of short-term liquidity due to market turbulence.
The arrangement will thus improve financial stability in the region, RBI added.
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