SAARC to fast-track development bank: Nepal

South Asian countries, including India and Nepal, would fast-track the process of setting up of the SAARC Development Bank to garner funds for development of infrastructure in the region.

During the meeting of trade ministers of SAARC countries in Bhutan last month, it was in-principally agreed for setting up of the bank.

"Setting up of the SAARC Development Bank should be taken up on a fast-track (basis)," Nepalese Minister of Commerce and Supplies Sunil Bahadur Thapa told PTI.

Thapa said the proposal of setting up of the bank was discussed in the meeting in Bhutan.

"Now it will be the Finance Ministers from the SAARC region to discuss and look at the modalities," he said.

He added that the existing SAARC Development Fund could be merged into the bank.

SAARC Development Fund was set up with a paid-up capital of $300 million. It extends financial support to various social sector programmes. India has contributed $189 million to the fund.

The decision regarding the bank comes close on the heels of BRICS leaders formalising the framework for the BRICS Development Bank.

South Asian Association for Regional Cooperation (SAARC) comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Sri Lanka, Pakistan and Nepal.

The countries are signatories to the South Asian Free Trade Agreement (SAFTA) on goods that came into force in 2006.

Inadequate infrastructure in the South Asian region is one of the main reasons for the slow growth in trade and investments.

The intra-SAARC trade is only 5 per cent of the region's total trade with rest of the world, while in the case of European Union, Asean and Latin America, their trade share is much higher.