Bangladesh Bank on Sunday enhanced the size of the refinance scheme for the jute sector by Tk 100 crore and extended its tenure for another five years.
The central bank issued a circular in this regard on the day which also reduced the applicable interest rate for the borrowers — jute millers and exporters.
Under the new circular, banks, as like the earlier policy, would get fund from the central bank at bank rate, while the jute millers and exporters would get fund from the refinance scheme at 8 per cent instead of existing 9 per cent. Enhanced size of the revolving fund would become Tk 300 crore.
BB launched the refinancing scheme with a fund of Tk 200 crore in 2014 to support jute sector for bringing back its glorious past.
After the extension of tenure of the fund, banks would be able to get fund for the jute sector till June, 2024.
Eighteen private and public commercial banks were nominated for channelling the fund to the public and private jute mills, raw jute traders and exporters.
The banks are — Sonali Bank, Rupali Bank, Agrani Bank, Janata Bank, Basic Bank, United Commercial Bank, IFIC Bank, National Bank, Prime Bank, AB Bank, Mercantile Bank, Uttara Bank, Bank Asia, Standard Bank, One Bank, The City Bank, NRBC Bank and Rajshahi Krishi Unnayan Bank.
Banks could provide loan to the jute mills and exporters for one year to purchases jute from farmers subject to repayment or adjustment of each quarterly interest and real amount.
The loan could be renewed yearly in the five years tenure subject to repayment or adjustment of principal and interest amount in every year.
Earlier in December 2018, the government offered jute sector businesses a moratorium facility for partial or total amount of their outstanding loans taken from different banks.
Under the facility, banks were allowed to transfer working capital loans, issued to the jute businesses, along with the interests to a block account for two years and were allowed to repay the loans in 10 years.
Under the facility, outstanding loans and interests of the jute businesses till October 31, 2018 were allowed to bring under the facility and the rate of interest on the transferred fund was fixed at cost of fund basis.
However, the entities which have received loans from the refinance scheme for the jute sector were made ineligible for the block account facility.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Miscellany