Mains Paper 2: IR | India and its neighborhood- relations.
From UPSC perspective, the following things are important:
Prelims level: What is LoC?
Mains level: Good relations with Bangladesh and other neighborhood has became more important due to rising Chinese influence in the region.
Line of credit (LoC) agreement
- India is signing an LoC agreement involving USD 4.5 billion to be spent for its infrastructure and social sector development
- Agreements for the Promotion and Protection of Investments’ would also be signed
Particulars of the agreement
- Bangladesh would have to purchase 65 to 75 per cent of the services, goods or works from the Indian market with the money to be provided under the third LoC
(following the precedence of the previous two nearly identical agreements)
- Government agencies already undertook 17 development projects to be implemented with the upcoming USD 4.5 billion loan
- The two countries signed the first LoC in August 2010 while the second one was inked in March, 2016
Line Of Credit – LOC
- A line of credit, abbreviated as LOC, is an arrangement between a financial institution, usually a bank, and a customer that establishes a maximum loan balance that the lender permits the borrower to access or maintain
- The borrower can access funds from the line of credit at any time, as long as he does not exceed the maximum amount set in the agreement and as long as he meets any other requirements set by the financial institution, such as making timely minimum payments