BB slashes green fund interest rate

Staff Correspondent | Published: 22:50, Aug 17,2017

 
 

Bangladesh Bank on Thursday cut the interest rate of green transformation fund (GTF) for the export oriented textile and textile products and leather manufacturing industries with a view to encourage the businesspeople to use the refinance scheme.
From now on the businesspeople will be allowed to take loans from the refinance fund counting an interest rate of six-month USD LIBOR plus 1 per cent instead of existing six-month USD LIBOR plus 2.25 per cent, according to a BB circular issued on Thursday.
The authorised dealers will determine their own loan interest rates to the borrowers covering their cost of borrowing from the fund and operational expenses, plus a reasonable risk-adjusted spread and profit margin (now typically
expected to be in the range of 1.00 to 2.00 per cent above the cost of borrowing), the circular said.
The BB introduced the refinance scheme namely GTF amounting to $200 million on January 15, 2016 for the export oriented industries of the textile and leather sectors to set up environment-friendly infrastructures.
The GTF is intended to facilitate access to financing in foreign exchange by all manufacturer-exporters in export oriented textiles and textile products, and leather manufacturing sectors to import capital machinery and accessories for implementing environment-friendly initiatives.
The refinance fund are being provided for water use efficiency in wet processing, water conservation and management, waste management, resource efficiency and recycling, renewable energy, energy efficiency, heat and temperature management, air ventilation and circulation efficiency and work environment improvement initiatives in the export oriented textiles and leather industries. 

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