Question
Consider the following statement about India extended
Line of Credit to Sri Lanka. I. India has extended 8 Lines of Credit (LOCs) to Sri Lanka amounting to USD 1850.64. II. India and Sri Lanka both are the member country of ASEAN. III. This line of credit is highly increased in the past 10 years. Which of the above is/are not correct?Solution
A line of credit is a credit facility extended by a bank or other financial institution to a government, business or individual customer that enables the customer to draw on the facility when the customer needs funds. Statement I is correct -: India has extended 8 Lines of Credit (LOCs) to Sri Lanka amounting to USD 1850.64 million. Statement II is not correct -: Association of Southeast Asian Nations (ASEAN) is a regional grouping that aims to promote economic and security cooperation among its ten members: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Statement III is correct -: in sectors including railways, infrastructure, defence, renewable energy, petroleum and fertilizers in the past 10 years. In January 2022, India extended a USD 400 million currency swap to Sri Lanka under the SAARC Framework and deferred successive Asian Clearing Union settlements till July 6, 2022. A Line of Credit of US $500 million was extended to Sri Lanka for importing fuel from India.
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