15:14 GMT +317 October 2018
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    18th South Asian Association for Regional Cooperation (SAARC) summit in Kathmandu on November 26, 2014

    South Asian Development Fund to be Converted Into Full-Fledged Bank

    © AFP 2018 / NARENDRA SHRESTHA / POOL
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    According to a World Bank study, the South Asian region needs to invest between $1.7-2.5 trillion to close its energy, transportation, telecom and environmental infrastructure gaps.

    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.

    READ MORE: SAARC Bears the Weight of India-Pakistan Rivalry

    "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.

    The three-day SDF conclave that concluded in New Delhi on Tuesday saw deliberations among members on ways to rope in top institutions like the World Bank, Asian Development Bank and the Asian Infrastructure Investment Bank (AIIB) to invest in infrastructure projects in the South Asian region.  

    "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.

    READ MORE: India Remains Committed to South Asian Association for Regional Cooperation

    The SAARC comprises Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.

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    Tags:
    financial center, regional budgets, investments, infrastructure, SAARC, India, Sri Lanka, Bhutan, Nepal, Pakistan
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