The Bangladesh Bank on Sunday formed a Tk 1,000 crore fund from which export-oriented industries can take loans at 6 per cent interest for technological upgrades.
“There is no alternative to the modernisation of industrial machinery and technological development for increasing the competitiveness of export-oriented industries in the international market,” said Md. Serajul Islam, executive director and spokesperson of the central bank.
The fund will help to make the export-oriented industries more vibrant in the international market, he added.
A total of 32 types of industries including garment factories making high-value additions in production, pharmaceuticals, software and IT-enabled services, jute goods, and footwear and leather goods will be eligible for loans from the fund.
The fund will run under a refinancing scheme, meaning banks will first give out the loans before being reimbursed by the central bank.
The central bank issued the guidelines for operating the fund under the Export Policy 2018-2021 that has been drafted with the view to becoming a developing country by 2024 and a developed country by 2041 and attaining sustainable development goals by 2030.
Interested banks and non-bank financial institutions (NBFIs) will have to sign a participation agreement with the central bank.
Banks and NBFIs can avail the fund at one percentage point less than the bank rate prevailing at the time.
The bank rate is the interest rate at which a central bank lends money to banks. It is 4 per cent at present.
Banks and NBFIs will be allowed to charge borrowers at most three percentage points more than the rate at which they avail the fund.
The tenure would range from three years to 10 years.
The grace period for the loan would depend on the bank-customer relationship but it would not be for more than one year.
The interest rate of the fund will depend on the duration for repayment.
It is 5 per cent for less than five years, 5.5 per cent for the repayment horizon of five to eight years, and 6 per cent for eight to 10 years.
Loan defaulters would not be eligible for the fund and the banks and NBFIs that have default loans of upwards of 10 per cent of their total outstanding loans will be barred for availing the fund.