Cenbank mandates anti-money laundering certification for Tk20,000cr refinance fund
Banks must verify that borrowers have no record of money laundering, fraud or loan misuse before extending financing under the government's industry revival scheme.
Highlights
- BB tightens eligibility rules for Tk20,000cr pre-financing scheme
- Borrowers linked to money laundering or fraud barred from the fund
- Banks must certify applicants' compliance before approving loans
- Scheme offers loans at up to 7% interest to revive closed industries
The Bangladesh Bank has made it mandatory for banks to obtain certifications confirming that applicants were not involved in money laundering, fraud, fund diversion or misuse of previous loans before extending financing under the government's Tk20,000-crore pre-financing scheme aimed at reviving closed industrial and service sector enterprises.
The central bank issued a circular to all banks today (7 July), introducing additional conditions for lending under the scheme.
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Under the new instructions, enterprises that are loan defaulters or have been involved in money laundering, fraud, forgery, diversion of funds or misuse of previous loan proceeds will not be eligible to receive financing from the fund.
To enforce these restrictions, banks must obtain certifications confirming that prospective borrowers have not engaged in such activities before approving loans.
The circular also requires banks with surplus liquidity to certify that those funds have been invested in the country's productive sectors.
The Bangladesh Bank first announced the scheme in a circular issued in June. The Tk20,000-crore fund forms part of the government's previously announced Tk60,000 crore "Production and Employment Revival" stimulus package.
The initiative is intended to restart closed factories, revive stalled export activities and create employment opportunities for unemployed young people through targeted credit support.
Under the scheme, participating banks will pay 4% interest to the Bangladesh Bank, while the maximum lending rate for borrowers has been capped at 7%. Borrowers will receive a six-month grace period on interest payments, after which interest servicing will commence.
The maximum loan available to any single company or business group under the scheme has been set at Tk200 crore. Each loan will have a maximum tenure of one year, although renewals will be allowed subject to the availability of funds and satisfactory repayment performance.
