Within a month of introducing the reference rate-based new interest-rate regime, the Bangladesh Bank made a major change by relaxing the rate for pre-shipment export loans.
According to the latest development, the central bank has asked commercial banks to add a maximum of 2% margin to the reference lending rate, known as the six-month moving average rate of treasury bill (Smart), when fixing the interest rate of pre-shipment export loans.
The Banking Regulation and Policy Department (BRPD) of the Bangladesh Bank issued a circular instructing banks to follow this new rate before finalizing the interest rate.
A pre-shipment export loan is a short-term loan that is provided to exporters to finance the purchase, processing, manufacturing, or packing of goods prior to shipment.
According to the central bank circular, in cases where all installments of a loan or partial installments have become overdue, a maximum of 1.5% penalty interest can be imposed on the entire outstanding loan of a working capital loan or on the installments of a demand loan that are behind schedule.
Last month, the central bank introduced the market-based lending rate for banks, replacing the 9% lending rate cap that had been in place since April 2020.
