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South Asia to form Saarc Development Bank

Staff writer |
South Asian nations have agreed to establish a Saarc Development Bank. The bank is expected to finance infrastructure development in the region, which is grappling with poor infrastructure.

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During the eighth meeting of the South Asia Free Trade Area (SAFTA) Ministerial Council held from July 23-24 in Thimphu, Bhutan, the member countries agreed to materialise the agreement during the Saarc Summit scheduled for Nov 11-12 in Kathmandu. For this, they will take ahead the process through a "fast-track mechanism". The proposal of the bank was floated by India in the meeting.

It has just been a few days since the Cabinet decided to become the founding member of China-promoted Asian Infrastructure Investment Bank (AIIB), the country is set to become founding member of another bank dealing in the infrastructure sector. Recently, BRICS emerging economies, including Brazil, Russia, India, China and South Africa, also decided to form an infrastructure bank.

MoCS Joint-Secretary Jib Raj Koirala, who was a member of the Nepalese delegation, said the meeting "agreed in principal" to set up the bank "as soon as possible".

"However, issues related to the bank’s paid-up capital, structure and functioning mechanism are yet to be finalised."

Besides the Saarc Development Bank, the meeting also agreed to implement the Vehicle Agreement and a Railways Agreement in the upcoming Saarc meet.

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