South Asian counters have agreed to focus on activating the infrastructure and economic windows under the Saarc Development Fund (SDF), while putting the proposed Saarc Development Bank on the backburner.

Although India had proposed opening such a bank at the eighth meeting of the South Asia Free Trade Area (Safta) Ministerial Council held in Thimpu, Bhutan, last year, it was reported in the India media latter that a panel formed by the Indian government had suggested the bank would not be feasible.

At a secretary-level meeting held on Wednesday ahead of the 7th Saarc Finance Minister’s meeting, officials decided to use available windows of financing instead of introducing new one, according to Madhu Marasni, joint secretary at the Finance Ministry, who participated in the meeting. “The meeting didn’t reject the idea of forming a new bank, but reached an understanding on using the available windows of infrastructure financing in South Asia,” he said.

The infrastructure window of the SDF would cover projects in the area of energy, power, transportation, telecommunications, environment, tourism and infrastructure, while the economic window would primarily look after non-infrastructure funding. The Saarc Summit held last year in Kathmandu had decided to activate these windows. The existing social window offers grant and technical assistance to member countries in their poverty alleviation and social efforts.

The officials focused their discussions on fixing interest rate and funding long-term infrastructure projects, while activating the new windows.

Following the establishment of China-sponsored Asian Infrastructure Investment Bank (AIIB) and New Development Bank of BRICS emerging economies, the proposed Saarc Development Bank was thrown into uncertainty.