Businesses urge rate cuts, EDF expansion to ease pressure on private sector

Business leaders have urged Bangladesh Bank Governor Md Mostaqur Rahman to cut lending rates and expand key financial support, including the Export Development Fund (EDF), to ease mounting pressure on the private sector.
The demands were raised at a meeting with the central bank on Monday, where a delegation led by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Administrator Abdur Rahim Khan submitted a 12-point proposal. 
FBCCI Secretary General Md Alamgir said the governor responded positively to several proposals.
Call to expand EDF
Leaders proposed increasing the EDF, used to provide low-cost dollar loans for raw material imports, from about US$2.2 billion to $5 billion, with a longer-term target of $8 billion. 
They also called for extending loan tenures from one year to five years and cutting interest rates from 5% to 2%.
Alamgir noted the EDF had previously reached $7 billion before being scaled down due to defaults, misuse, and IMF-related conditions.
BKMEA President Mohammad Hatem said the governor had agreed in principle to expanding the fund.
Push for lower rates, relaxed loan rules
Businesses also urged bringing lending rates down to single digits to boost investment and competitiveness, while calling for reduced government borrowing from banks to improve private sector credit flow.
They proposed easing loan classification rules by extending the default period from three months to six months and preventing automatic default classification of related entities. 
They also called for extending loan rescheduling tenures from 4-5 years to up to 10 years.
Exchange rate and policy support
Citing rising remittance inflows, business leaders said there was no dollar shortage and urged the central bank to prevent further increases in the exchange rate. 
Alamgir said the governor assured that any unjustified depreciation would be addressed.
Leaders also sought policy support to offset rising costs driven by global instability, including the Middle East conflict. 
They called for low-interest financing for green projects, reintroduction of export loans at the shipment stage, and relaxation of single borrower exposure limits.
Support measures for distressed industries – such as easier loan terms, rescheduling, and stimulus packages – were also requested.
Reforms and rising costs
The meeting also discussed banking sector reforms, including the merger of five banks into Sammilito Islami Bank, with business leaders stressing the need to protect depositors and borrowers while restoring discipline.
They warned that rising fuel, raw material, and transport costs are squeezing margins and investment, underscoring the need for timely policy support to sustain businesses, economic activity, and employment.