Bangladesh Bank (BB) on Thursday signed participation agreements with nine banks and five non-bank financial institutions (NBFIs) to implement a Tk 10 billion refinance scheme for export-oriented industries.
BB formed the refinance fund on January 17 this year in conformity of the ‘Export policy 2018- 21’ to enhance the competitive capacity and sustainability of export-oriented industries.The fund would be granted for the development and upgradation of technology and capital machinery for energy-efficiency, automation, operations management, waste management; air, heat and water management, workplace management, human resource development and sales and marketing.
The fund will carry interest rates between 5 per cent and 6 per cent.
The priority sectors specified in the export policy 2018-21 along with 32 special development sectors would get fund from the revolving fund.
The industries would get up to 70 per cent of their upgradation expenses from the refinance fund for up to 10 years with up to one year grace period. However, consultancy, maintenance, repairing and working capital expenses cannot be excluded from the loan amount.
BB Deputy Governor Ahmed Jamal was present at the deal signing ceremony as the chief guest. Md. Shahidul Islam, Executive Director, Khondkar Morshed Millat, General Manager and other high officials of the Sustainable Finance Department (SFD) of the central bank were also present on the occasion.
Eastern Bank, Mutual Trust Bank, Mercantile Bank Limited, Southeast Bank, Exim Bank, Premier Bank, NRB Bank, Bangladesh Krishi Bank, IPDC Finance, IDLC Finance, Bangladesh Finance and Investment Co. Ltd, United Finance and Infrastructure Development Co. Ltd are the participating banks and NFIs for the refinance scheme.To finance the initiatives, the banks and financial institutions would get fund from the central bank at 3 per cent (1 percentage point lower than the current bank rate of 4 per cent). Banks and financial institutions would be allowed to charge another 2-3 per cent as margin on the export-oriented industries.
To accomplish the targets as per the government’s Vision 2021, enhancement of per capita export earnings and a notable increase in its contribution to GDP would be vital, a recent BB circular said.
The refinance fund was formed with the BB’s own source.