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.
- Earlier, it had approved $500 million for ‘Covid-19 Emergency Response and Health Systems Preparedness Project’ initiated by India.
- $750 million loan: It is co-financed by the AIIB and the Asian Development Bank.
- 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
- 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.
- 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.