The Export-Import Bank of India (Exim Bank) will give loans worth about Rs 29,200 crore (USD 4.5 billion) to Bangladesh for financing of various social and infrastructure projects.
The Exim Bank entered into an agreement with the Bangladesh government on October 4, 2017 to extend this line of credit facility on behalf of the Indian government, the RBI said in a notification.
Bangladesh will also use this financing facility to import consultancy services from India.
Under the arrangement, financing export of eligible goods and services from India would be allowed which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement, the RBI said.
The goods include plant, machinery and equipment; and services include consultancy services.
Life of credit (LoC) is a kind of soft loan that is given on concession rates to the borrower.
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