Sri Lanka secures US$ 1bn short-term concessional loan facility from India

Secretary to the Ministry of Finance S. R. Attygalle (left) and Deputy General Manager of State Bank of India Shri Pushkar Jha exchanging copies of the signed agreement

• The loan to be used for procurement of food, medicines and other essential items 
• Coordinating mechanism set up for India’s Finance and Foreign Ministers and Sri Lanka’s Finance Minister to stay in touch 

Concluding his two-day official visit to New Delhi, Finance Minister Basil Rajapaksa yesterday witnessed the signing of the agreement pertaining to a short-term concessional loan facility of US$ 1 billion extended by the Government of India to the Government of Sri Lanka through State Bank of India.

The loan facility, which formed the key component of the four-pillar economic cooperation arrangement agreed between India and Sri Lanka during Minister Rajapaksa’s visit to New Delhi in December last year, was extended to the Government of Sri Lanka for procurement of food, medicines and other essential items.

The signing ceremony was held at the Ministry of Finance in New Delhi in the presence of Finance Minister Basil Rajapaksa, External Affairs Minister of India Dr. S. Jaishankar and the Indian Finance Minister Smt. Nirmala Sitharaman. 

Managing Director of the State Bank of India Ashwini Kumar Tewari and the bank’s General Manager Vinod Kumar were also present on this occasion.

Secretary to the Ministry of Finance S. R. Attygalle signed the agreement on behalf of the Government of Sri Lanka and Deputy General Manager Shri Pushkar Jha signed on behalf of the State Bank of India.

Prior to the signing ceremony, Finance Minister Basil Rajapaksa was hosted jointly by the Finance and External Affairs Ministers of India for bilateral talks at the Finance Ministry in the North Block, a statement by the Sri Lankan High Commission in New Delhi said.

“During the bilateral talks, the two sides agreed to set up a framework for short, medium and long-term economic cooperation between the two countries aimed at addressing Sri Lanka’s present economic challenges.

With this objective, the three ministers agreed to stay in regular contact and a coordinating mechanism consisting of senior officials from the two countries was set up to maintain regular dialogue,” the statement said.

Finance Minister Basil Rajapaksa was accompanied to this meeting by Sri Lanka’s High Commissioner to India Milinda Moragoda, Secretary to the Ministry of Finance S. R. Attygalle and Deputy High Commissioner of Sri Lanka to India Niluka Kadurugamuwa.