Addis Ababa, Sep 22 : India's Exim Bank, the largest provider of lines of credit to Africa, is set to join a regional bank that will not only ensure greater capital but also help improve commercial ties, an official said.
"It is a proposition that has been considered by our colleagues in India and I think it is a matter of time before they take a decision. But there is no specific timeframe for India to come in," Admassu Tadesse, president of the Eastern and Southern African Trade Development Bank (PTA Bank), told IANS.
"We already have very good relations with India through its Exim Bank for a very long time but we want their presence in the bank more than their financial support," Tadesse added.
India has long and deep cultural and commercial interests in African countries like Kenya, Uganda and South Africa, where there are large Indian communities.
"We feel India belongs to the bank as a non-African country and we would be very happy if India took its rightful place in the bank alongside the other African counties," Tadesse noted.
"But we do not want to push our colleagues in New Delhi because we know each country has its priorities to consider," he added
The Export Import Bank of India's relationship with PTA Bank dates to 1992 when it provided its first line of credit to the institution. In 1998, the two banks signed a technical cooperation agreement for Indian experts to assist in business restructuring of a number of bank-funded projects. Several lines of credit have since been signed, bringing their total value to $100 million dollars.
India's Exim bank, therefore, ranks as one of PTA Bank's significant business partners. In addition to financial and economic viability considerations, projects funded under lines of credit ensure the import of machinery and other capital goods from India.
For India to be a member, it would have to purchase shares according to the limitation laid down by PTA Bank - equity of not more than 15 percent, according to Premchand Mungar, director of the Legal and Corporate Affairs Department of PTA Bank.
"This is because we do not want external countries to have too big a shareholding power so that they would have a controlling interest," Mungar told IANS.
"Though most countries start purchasing shares from the minimum required, we expect India might purchase 8 to 10 percent shares," he added. (IANS)