Companies with the technical skills, infrastructure, and commercial capacity to take over or lease a closed unit and restart operations will also receive priority consideration.
Bangladesh Bank has launched a $1.63 billion pre-finance scheme to revive closed or sick large industrial and service-sector enterprises.
Companies with the technical skills, infrastructure, and commercial capacity to take over or lease a closed unit and restart operations will also receive priority.
Loan defaulters, money launderers, fund diverters and fraudsters will be barred from the low-cost loans.
Loan defaulters and those involved in money laundering, fund diversion and fraud will be barred from the low-cost loans under the guidelines issued by the central bank said.
Any existing loan account cannot be adjusted or settled using loans obtained under the scheme.
The central bank will draw funds from the surplus liquidity held by scheduled banks and lend them to participating banks at a low interest rate. The banks will then pass these funds on to eligible borrowers as working capital at an interest rate of 7 per cent.
Many large factories and export-oriented businesses in the country still have functional machinery, but cannot operate at full capacity as they lack the cash needed to pay workers, purchase raw materials, settle utility bills or fulfill export orders. This fund is intended to fill that gap, acxcording to domestic media reports.
To take advantage of the fund, a bank must first sign a participation agreement with the central bank. The scheme will be managed by the Banking Regulation and Policy Department.
The scheme will operate on a revolving basis for three years, i.e., money repaid by one borrower can be lent out again within the scheme’s lifespan. Each individual loan will have a maximum term of a year. If a borrower’s business performs satisfactorily, the bank may apply to Bangladesh Bank for a renewal.
Banks must pay the central bank 4-per cent interest rate per annum, with the interest charged quarterly. However, no interest will be due during the first six months after disbursement.
No single company or business group may receive more than Tk 200 crore ($16.3 million) under the scheme at any given time.
Meanwhile, economists urged the government to continue a tight monetary policy stance as the latest power tariff and petroleum product price hikes could further heighten inflationary pressure.
The existing monetary policy is not tight enough to contain inflation as an increased volume of money is being injected into the market through various central bank instruments, they said.
The observations were shared at a stakeholder meeting between the Bangladesh Bank and leading economists, senior bankers and journalists.
The economists also suggested the central bank make a foreign exchange strategy considering the future overseas payment pressure as the remittance boom may not continue in the coming months.
Fibre2Fashion News Desk (DS)
