New Delhi (Sputnik): The South Asian Association for Regional Cooperation (SAARC), comprising eight nations including India and Pakistan, has unanimously approved a plan to convert the SAARC Development Fund (SDF) to a full-fledged regional bank in the near future. Presently, the SDF is the umbrella financial institution overseeing projects in SAARC member countries with an authorized capital of $1.5 billion and a total capital base of $500 million.
"Our strategy is to convert the SDF into a regional bank in the near future. Right now, the focus is to strengthen our credit portfolio; once we have a lender's status then we can raise funds from the capital market through various instruments like bonds etc.", Dr. Sunil Motiwal, CEO of SDF, said in New Delhi on Tuesday.
#SAARC Development Fund is in advanced-level talks with the @AIIB_Official for co-financing 4 cross-border #infrastructure #projects across the region, a move to lay the ground for the body becoming a regional development bank in the near future pic.twitter.com/Nt7TsMwC2K— Tickerplant Ltd. (@Tickermarket) July 4, 2018
"We are in touch with 40 local banks from the member states. Some of them like SIDBI have formalized MoUs with SDF," Motiwal said when asked how the SDF intends to achieve financial connectivity among SAARC members.
The SDF has aimed to enhance its credit portfolio to $300 million in the next few years by financing a range of energy, transportation, telecom and environmental projects in the region.
The SAARC comprises Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.