Bangladesh Bank has reviewed some directives of its earlier guideline to establish own 'start-up fund' by scheduled banks.
SME and special programmes department of the central bank issued a notice on Monday in this regard and sent a letter to the top executives of all schedule banks.
According to the directive, banks have to set up their own start-up fund with money equivalent to 1 percent of the bank annual net profit from 2021 to 2025.
The BB also asked banks to form start-up fund and preserve 1 percent of net profit of the bank to the fund as revolving fund.
The BB issued details of start-up fund on March 29, 2021, citing that start-up sector has been grown in many countries in the world and Bangladesh there is potential to grow the start –up sector.
The BB guidelines have also barred banks from disclosing or sharing the ideas or proposals which would be placed by the entrepreneurs.
An entrepreneur with innovative ideas will get up to Tk 10 million loan from the Bangladesh Bank’s start-up refinance fund of Tk 5 billion against personal guarantee and academic certificate.
The BB guideline also stated that start-ups would get loans from the fund for the highest five years at the rate of 4 per cent interest. Banks will get money from the BB at the rate of 0.5 per cent interest and the banks would be allowed to charge start-ups another 3.5 per cent.
Apart from the BB’s Tk 5 billion refinance fund, the central bank has also made it mandatory for all scheduled banks to form separate start-up funds with their own funds.The BB said that the banks, under agreement with the start-ups, would be allowed to take personal guarantee from individuals, not more than two, accepted to both the parities.
For both the general and vocational degree-holders, the start-up owners will have to submit their original certificates as guarantee. The start-up firms would get up to one year grace period against their loans, said the BB guidelines, adding that the loans must be disbursed in at least three phases and cannot be disbursed at a single payment. The disbursing of subsequent phases would depend on implementation of the preceding installments.
None would be entitled to receive such loans from more than one bank or for several projects.
