Bangladesh Bank has issued a procedure of medium and long term external borrowing by industrial enterprises located in the Export Processing Zones (EPZS) of Bangladesh.
The approvals would be accorded by the Board of Investment (BOI) based on decisions of its Scrutiny Committee, chaired by Bangladesh Bank Governor, said a circular the central bank issued yesterday with immediate effect. Earlier, there was no certain procedure for the medium and long term external borrowing, said a senior central bank executive.
According to the procedure, the EPZs units should submit borrowing application and related documents through their nominated authorised dealer banks for onward referral via BEPZA to Bangladesh Bank head office.
Approval application must also be supported by analyses and papers in regard to commercial viability of the project, the project’s capacity to service the proposed debt from its earnings, cost competitiveness of the project’s outputs in domestic and external markets, existing domestic output capacity in the sector to which the borrowing proposal relates, and the potential domestic and external demand given the estimated output cost structure, existing indebtedness structure of the project sponsors, duly supported by reports of their bankers and of the CIB at Bangladesh Bank.
The banks will forward the applications to BEPZA, after satisfying themselves about completeness of the applications and accompanying documents.