• Wednesday, Jun 16, 2021
  • Last Update : 05:48 pm

Industry stimulus: Bangladesh Bank okays above Tk9,000cr loans

  • Published at 07:22 pm July 26th, 2020

Loan disbursement from the Tk30,000 crore fund is increasing rapidly as roughly half of the amount is expected to be disbursed by the end of this month

The Bangladesh Bank (BB) has so far approved loans amounting to Tk9,200 crore against 650 firms under the stimulus package for industries and services affected by the coronavirus pandemic.

The government has announced stimulus packages totaling over Tk1,00,000 crore to overcome the economic impact of the virus, including a Tk30,000 crore package for industries and service sectors.

Loan disbursement from the Tk30,000 crore fund is increasing rapidly as roughly half of the amount is expected to be disbursed by the end of this month, says  a high official of the BB.

After verifying loan proposals of scheduled banks, the BB has so far approved Tk9,200 crore loans in favour of covid-19 affected firms from the Tk30,000 crore stimulus package, he adds.

He says banks have intensified loans disbursement activities as the BB instructed banks to complete loans disbursement from all stimulus funds by August this year.

In May this year, the BB set a limit on how much working capital a bank could lend to the coronavirus affected firms. The BB fixed limits based on the existing working capital loans of borrowers.

Loans or investment of banks must be within 30% of their existing working capital loans of borrowers as of December 31, 2019, as per the BB’s guidelines on the stimulus package.

The loan limit of Mercantile Bank from the stimulus funds was set at Tk774 crore by the BB. The bank has already disbursed Tk250 crore from the fund. 

Talking to Dhaka Tribune, Mercantile Bank additional managing director Mati Ul Hasan has said they received 800 applications from the Covid-19 affected industries. 

Around Tk600 crore is now in the process of sanction which will be disbursed within the shortest possible time, he adds.

“We will complete the loan disbursement from all types of stimulus packages by next month,” Mati Ul Hasan told Dhaka Tribune.

Islami Bank Bangladesh Limited has the highest Tk2,800 crore loan limit from the Tk30,000 crore fund. 

The bank’s deputy managing director Abu Reza Mohd.Yeahia says a good number of clients have applied for working capital loans from the stimulus package. 

A big amount of loans is in the process of sanction, he adds.

The loan limit of state owned Agrani Bank was set at Tk914 crore. The bank has so far sanctioned Tk600 crore from the stimulus fund against 15 industries including Acme and Noman group.

Its managing director Mohammad Shams-Ul Islam has said that initially their bank disbursed Tk19 crore to the affected corporations. 

Another Tk600 crore has been sanctioned against 15 industries which is in the process of disbursement, he mentions.

The loans limit of Sonali Bank was set at Tk1,622 crore by the BB, National Bank at Tk1,631 crore, UCB at Tk1,163 crore, Dutch Bangla Bank at Tk1,068 crore, The City Bank at Tk1,023 crore, EXIM Bank at Tk994 crore, Eastern Bank at Tk985 crore, Prime Bank at Tk912 crore and limit of Bank Asia was set at Tk819 crore by the BB.

On April 12, the BB launched the stimulus package, allowing banks to get an interest subsidy of 4.50% on disbursed loans, while end-users (borrowers) will get at 9% interest rate.

The BB later formed a Refinance Scheme of Tk15,000 crore for lenders to implement the stimulus package. 

Under the scheme, banks will get funds in the form of working capital at 4% interest from the BB, while clients will get it at 9%. 

In order to receive the refinance scheme, banks will have to give at least 50% loan to industrial and service sector businesses from their own sources.

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