As part of a broader macroeconomic push to revive shuttered industries, accelerate national production, and generate formal employment, Bangladesh Bank has unveiled a specialized Tk20,000 crore refinance fund under its Tk60,000 crore "Production and Employment Resuscitation" package.
According to the central bank, the facility is strategically engineered to inject essential working capital into closed or partially operational manufacturing plants, effectively returning them to active factory floors.
However, immediately following the policy’s rollout, the central bank’s implementation parameters sparked intense debate across the country's industrial sectors.
Trade bodies and entrepreneurs are actively questioning the operational logic behind mandatory "clean" Credit Information Bureau (CIB) reports, an aggressive one-year loan tenure, and baseline borrower eligibility profiles.
Industrial insiders strongly contend that the very distressed enterprises the fund is legally designed to salvage are structurally incapable of meeting these rigid underwriting criteria.
Under the guidelines issued by Bangladesh Bank, large-scale manufacturing and service enterprises that are currently non-operational or running significantly below capacity can access up to Tk200 crore in emergency refinancing.
The state has structured the facility with consumer-friendly baselines, capping the final interest rate at 7% and embedding a preliminary six-month grace period.
Eligible enterprises are legally permitted to deploy these tranches to settle overdue labor wages, clear outstanding utility arrears (electricity and gas), secure raw material supplies, and restart dormant assembly lines.
However, the regulatory barrier comes in the form of a strict anti-default clause: any firm tied to money laundering, active financial fraud, fund diversion, or any negative classification on their CIB report is completely barred from accessing the facility.
The primary flashpoint of the industrial backlash centers on the mandatory clean CIB requirement.
Business leaders note that applying a standard credit assessment to an industrial plant that has been inactive for years reflects a disconnect from corporate realities.
"The core mandate of this package is to rescue closed factories," argued one prominent industrial entrepreneur in a policy forum.
"How can a factory that has been completely shut down—with zero operational revenue, zero market turnover, and dried-up cash flows—keep its banking records pristine and maintain a clean CIB report? Forcing this condition on distressed units undermines the very objective of the stimulus package."
Conversely, representatives aligned with the leadership of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) emphasize that the Tk60,000 crore umbrella facility is open to all manufacturing industries, not just apparel exporters.
They point out that small and medium enterprises (SMEs) can qualify for an additional 3% interest subsidy.
However, market critics note that while the framework appears inclusive on paper, small and mid-market factories face structural challenges in accessing these funds.
Historically, major corporate groups have absorbed the lion's share of sovereign export stimuli, leaving smaller independent operators with limited access to credit.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), stated that the clean CIB mandate severely threatens the efficacy of the entire recovery package.
"Demanding a flawless CIB record from an industrial facility that collapsed precisely due to an unaddressed liquidity crunch is entirely unrealistic," Hatem observed. "Financial distress is the primary reason these factories went dark in the first place."
The BKMEA chief suggested that public policy should prioritize firms that are currently on the verge of closure, where timely regulatory assistance can prevent operational collapse.
He offered a practical example: if a factory's monthly debt obligation stands at Tk1 crore but its current cash flow can safely support Tk50 lakh, the central bank should allow a temporary restructuring window.
Hatem emphasized that because industrial distress is non-uniform, applying a single underwriting template across different sectors is counterproductive.
Instead, the central bank should deploy a varied playbook, offering a mix of structural installment rescheduling, interest waivers, and long-term capital deployment.
Risk of capital diversion to non-viable units
Echoing these structural concerns, Mohiuddin Rubel, former director of the BGMEA, warned that retaining the rigid CIB condition would systematically lock out genuinely distressed but viable factories.
He called for a realistic relaxation of credit rules, paired with a clear distinction between viable and non-viable assets.
To protect the integrity of the fund, Rubel urged the establishment of a rigorous, bank-led monitoring mechanism to ensure that real entrepreneurs receive the capital while preventing any illicit fund diversion or capital flight.
A secondary point of contention within corporate boardrooms is the fund's aggressive repayment timeline.
The central bank's policy mandates that each refinancing loan must carry a maximum maturity of one year, subject to annual performance-based renewals.
Industrialists contend that restarting a long-dormant factory, re-hiring specialized labor, re-establishing global supply chains, and recapturing lost market share is a multi-year endeavor.
Forcing a distressed manufacturer to face full principal repayment within twelve months creates an unmanageable financial burden.
Business analysts point out that if a company possessed the cash velocity to clear a multi-million taka loan within a single year, it would not require an emergency sovereign rescue facility in the first place.
Senior officials within the banking sector quietly acknowledge these operational mismatches.
Speaking on the condition of anonymity, a high-ranking executive officer from Bangladesh Bank noted that while the clean CIB clause is an essential risk-management tool to prevent capital flight, it creates a practical bottleneck.
"The reality is that long-shuttered industrial units lack regular cash flows, which naturally leads to classified debt," the central bank official admitted.
"Applying a single credit baseline will exclude a significant portion of distressed factories. We must look beyond historical CIB statements and evaluate the asset's technical revival capacity, the sponsor's willingness to inject equity, and viable business restart plans. A separate, flexible evaluation framework is needed."
Similarly, the managing director and chief executive officer of a leading private commercial bank suggested that the central bank shift from historic credit metrics to project-based underwriting.