Cenbank drops 'large industry' term from Tk20,000cr scheme

Bangladesh Bank has removed the term "large industry" from its Tk20,000 crore pre-financing scheme for reopening closed industrial and service-sector businesses, potentially expanding the pool of businesses eligible for the facility.

The central bank's Banking Regulation and Policy Department-1 issued a circular letter today (17 September), amending several provisions of the original circular issued on 4 June and a subsequent circular letter issued on 7 July.

Under the revised directive, references to "large industry" in the earlier circulars will be replaced with "industry", removing the previous qualification from the relevant provisions.

Bangladesh Bank launched the Tk20,000 crore "Closed Industry and Service Sector Support Pre-financing Scheme" in June to help restart businesses that have shut down. Under the scheme, banks can obtain funds from the central bank at 4% interest and lend to customers at a maximum rate of 7%.

The latest circular also clarifies the application window. Subject to the availability of funds, eligible businesses can apply for pre-financing at any time during the scheme's three-year tenure.

Banks receiving funds under the scheme will pay Bangladesh Bank interest at 4%. However, interest payments will begin six months after the pre-financing is received, with the outstanding interest for the first two quarters payable at that point.

For borrowers, the interest rate is capped at 7%. Banks will also start collecting interest six months after disbursing the loan, including the interest accrued during the first two quarters.

The Bangladesh Bank said the revised directive would take effect immediately, allowing eligible businesses to seek the facility throughout the three-year tenure, subject to fund availability.