NEW DELHI: Call it an India fund for fighting Tamil Tigers in Sri Lanka. In a step that could have political and diplomatic ramfications, New Delhi is finalising a soft loan package of $100 million (Rs 400 crore) for Sri Lankan defence department to buy arms and ammunition, sources told Sunday ET.
Though the island nation does not come under the category of the Least Developed Countries (LDC), India has agreed to extend the loan at a highly confessional interest rate of just 2%. India normally charges an interest at London Interbank Offered Rate (LIBOR) plus 1- 2% for extending term loans to a country of Sri Lanka
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