Bangladesh is likely to use the money to buy MiG-29SMT fighter jets, upgrade an earlier batch of MiG-29s and purchase BTR-80 armored vehicles and Mi-171 military helicopters, the official Russian news agency RIA Novosti reported.
Announcement of the loan came during talks between Putin and Bangladeshi Prime Minister Sheik Hasina in Moscow.
The two countries also settled on a project to jointly build Bangladesh's first nuclear power plant.
They signed memorandums of understanding in various areas, including anti-terrorism, justice, healthcare and education.
Celebrity Families of 2014 [PHOTOS]