New Delhi, Oct 28 (IANS): Country's largest commercial bank, State Bank of India (SBI) has signed a loan agreement amounting to up to $1 billion with the Japan Bank for International Cooperation (JBIC).

Out of total amount, $600 million will be financed by the JBIC and $400 million by other participating banks. JBIC will provide a guarantee for the portion co-financed by the participating banks.

The loan is intended to promote smooth flow of funds for the whole range of business operations of Japanese automobile manufacturers in India.

JBIC is a policy-based financial institution, wholly owned by the Japanese government, with the objective of contributing to the sound development of Japan, the international economy and society.

On the occasion of signing the agreement, SBI's Deputy Managing Director, International Banking Group, C. Venkat Nageswar said: "It is a historic occasion for both SBI and JBIC, as for the first time we are entering into an untied loan. This will assist in achieving our Prime Minister's vision of making India 'Aatmanirbhar'.

Masayuki Tanimoto, Managing Executive Officer of JBIC, said: "As per one of the surveys, India is the most favoured nation for Japanese investment and this is one more step towards strong relationship between Japan and India."