Finance ministers from eight South Asian countries will begin a two-day meeting in New Delhi today to operationalise the $300 million Saarc Development Fund (SDF).

Meantime, Saarc home ministers will meet next month in the Indian capital to forge a coordinated approach to tackling terrorism in the region, our New Delhi correspondent reports.

The SDF was created as the Saarc leaders pledged to support projects to alleviate poverty and improve status of life in the region.

Finance Adviser Dr Mirza AB Azizul Islam will head the Bangladesh delegation at the meeting, which is being hosted by Saarc's current chair, India.

The ministerial meeting will be preceded today by a finance secretary-level meeting where joint secretary at finance division, Syed Monzurul Islam, will stand in for the finance secretary.

The Delhi ministerial meeting will mainly focus on finalising the recommendations on the fund's charter and by-laws -- prepared by the member countries' finance and foreign ministry and other related government officials at their August 21-22 Kathmandu meeting -- financial issues related to the roadmap of Saarc Economic Union and development of a regional capital market, official sources said.

The SDF succeeds the South Asian Development Fund (SADF), which was created in 1996 with the merger of Saarc Fund for Regional Projects and Saarc Regional Fund.

The regional organisation in the last few years has been considering proposals like Poverty Alleviation Fund, Infrastructure Fund, South Asian Development Bank, Media Development Fund and Voluntary Fund for the Differently Able Persons, in addition to the SADF.

In order to avoid proliferation of funds, the first meeting of financial experts in September 2005 examined the entire gamut of issues relating to the funding of Saarc projects and programmes.

The experts agreed that the proliferation of financing mechanisms would pose administrative, financial and operational difficulties following which Saarc leaders at their 13th summit in Dhaka in November 2005 decided to reconstitute the SADF into SDF to serve as the umbrella financial institution for all Saarc projects and programmes.

The SDF has been reconstituted with a permanent secretariat and three windows -- social, economic, and infrastructure. The social window, with an initial $300 million fund, is expected to fund, among others, poverty alleviation programmes and projects.

The infrastructure window will mobilise fund from within and beyond the region and fund infrastructural projects while the economic window will finance non-infrastructural projects.

Another meeting of experts was held on August 24-25 in Kathmandu to prepare recommendations on greater economic integration to help form the Saarc Economic Union, foreign ministry officials said.

Talking to The Daily Star, a finance ministry official said the Kathmandu meeting came up with a set of recommendations on investment promotion, service sector development and formation of a regional customs union.

The least developed members have favoured the process of developing a capital market, arguing that the linkage of capital markets mobilises funds for the domestic markets.

Saarc was founded in 1985 comprising Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Afghanistan became its 8th member at the 13th summit in Dhaka while China, Japan, South Korea, the United States and the European Union became the organisation's observers at the same summit.

Meantime, the two-day home minister-level meeting in the Indian capital on October 23-24 will discuss measures to harmonise national laws and procedures to meet the common challenge of fighting terrorism in the region, our New Delhi correspondent reported quoting official sources in New Delhi.

India is expected to ask the other Saarc countries to cooperate with each other in fighting the menace in a "sincere and meaningful" manner.

The meeting is likely to discuss an Indian proposal on establishing Saarc Convention on Mutual Assistance in Criminal Matters to effectively combat terrorism and organised crime, the sources said.

India is also expected at the meeting to seek early ratification of Additional Protocol to the Saarc Regional Convention on Suppression of Terrorism by the member nations.

Indian Prime Minister Manmohan Singh earlier asked the Saarc leaders at the 14th Summit in New Delhi to translate their commitments to root out terrorism into action after the regional leaders pledged that they would work together to eliminate the scourge.