State Bank of India ( SBI), the country's largest lender, has signed a loan agreement up to $1 billion with JBIC to fund business operations of Japanese automobile manufacturers in India.

The co-financing partners are SMBC, MUFG Bank, Mizuho Bank and Bank of Yokahama.

While $600 Mio will be financed by JBIC, $400 Mio will come from the other participating banks. JBIC will provide a guarantee for the portion co-financed by the participating banks.

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

SBI deputy managing director (IBG) C Venkat Nageswar said, "The friendship between India and Japan has a long history, rooted in spiritual affinity and strong cultural and civilisational ties. 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 "Atmanirbhar".

Added JBIC managing executive officer Masayuki Tanimoto, " 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."