The Maldives government has asked for reimbursement after paying interest on an interest-free loan issued by India, main opposition Maldivian Democratic Party (MDP) President Abdulla Shahid has said.
The payment was made for a treasury bond purchased by the State Bank of India (SBI) upon request from the Maldivian government to the Indian government. Under the agreement made in 2019 between the previous government and India, SBI subscribed to a total of USD 200 million worth of treasury bonds in USD 50 million instalments.
"One of the biggest constraints for us going into the financial crunch that we are in today is the fact that USD 50 million owed last year was repaid. It didn't need to be paid. [India] would have extended if they had requested an extension of the repayment period as they did with this USD 50 million," Shahid said while speaking on Adhadhu's "Etherefuh" programme.
The previous government rolled over the bonds every year with India paying the interest. But the current government repaid USD 50 million in January.
“They even paid it with interest. Under the agreement made between the Indian government and the Maldivian government, the USD 100 million loan, two tranches of USD 50 million, was interest-free. The Indian government paid the interest on it," said Shahid, who was the Foreign Minister during the previous government, providing further details.
The government made the payment in January "caught up in passion without checking the documents," Shahid said.
"However, when we reached December, they were a bit caught up in passion and not really deep into matters. They didn't check the documents. That's why when they paid that USD 50 million, they also paid back interest," he said.
"Then when Minister Zameer went this time, he apparently requested the Indian government to give back the interest paid by mistake."
While USD 50 million owed to India was rolled over in May, the Maldivian government will request the conversion of USD 50 million owed in September to a grant, Finance Minister Dr. Mohamed Shafeeq has said.
The Indian government has not made a decision on it yet.
