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AIIB Loan for India

  • 18 Jun 2020
  • 3 min read

Why in News

Recently, the Asian Infrastructure Investment Bank (AIIB) has approved a $750 million loan to India to strengthen the country’s battle against the adverse impact of Covid-19 pandemic on poor and vulnerable households.

Key Points

  • $750 million loan: It is co-financed by the AIIB and the Asian Development Bank.
  • Aim:
    • It aims to ensure economic resilience to prevent long-term damage to productive capacity, including human capital.
    • The support will go towards bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country’s health care systems.
  • Loan by AIIB to India:
    • AIIB’s sovereign loans to India amounts to $3.06 billion.
    • The current loan will be the second for India under AIIB’s Covid-19 Crisis Recovery Facility.
    • The Crisis Recovery Facility has been formed in response to urgent economic, financial and public health pressures and to support a quick recovery after the current crisis (Covid-19).
    • It will offer $5-10 billion of financing to public and private entities over 18 months i.e. from April 2020 to October 2021.
    • The funding is done either with the World Bank or ADB.
  • Loan by ADB to India:
    • It has assured Indian government of $2.2 billion support to fight against the Covid-19 pandemic.
    • Earlier, it had provided a $1.5 billion loan to India.

Asian Infrastructure Investment Bank

  • The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
  • It is established by the AIIB Articles of Agreement (entered into force 25th December 2015) which is a multilateral treaty.
  • Headquarters: Beijing, China
  • Members:
    • 102 members.
    • India joined AIIB in 2016 as a regional member of the Bank.
    • Further, fourteen of the G-20 nations are AIIB members including France, Germany, Italy and the United Kingdom.
  • China is the largest shareholder in AIIB with a 26.06% voting power, followed by India with a 7.62% voting power.

Asian Development Bank

  • ADB is a regional development bank established on 19th December 1966.
  • Headquarters: Manila, Philippines.
  • Members:
    • It has 68 members, 49 from within Asia.
    • India is a founding member.
  • As of 31 December 2019, ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
  • It is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Source: IE

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