14 banks to deal Tk 150 billion stimulus package for large industries

To support the implementation of the bail-out package announced by the Prime Minister, the Bangladesh Bank has formed a Tk 150 billion revolving refinance scheme, according to banking sources.Under this scheme, banks and non-bank financial institutions (NBFIs) will be entitled to get funds from the central bank’s refinance scheme at four per cent interest.

Banks and NBFIs will get 50 per cent as refinance from the Bangladesh Bank against the loans they disburse to affected industries and service sector entities.

In a bid to foster economic recovery, the government earlier declared a Tk 300 billion stimulus package for large industries and the service sector entities affected by the deadly virus. The banks will arrange the funds from their own sources.

To get the fund from the scheme, the banks or NBFIs would have to sign a participation agreement with the central bank, according to banking insiders.

The refinance facility will only be issued against the working capital provided by the banks to sectors allowed by the Bangladesh Bank, the sources said.

Earlier, on April 12 this year, the central bank – in line with the government’s announcement – issued guidelines on issuing working capital facility to industries and service sector entities affected by the pandemic, setting the interest rate ceiling at nine per cent.Of the nine per cent interest, the government will provide 4.5 per cent as a subsidy, and the remaining 4.5 per cent will be paid by the borrowers.