BB’S Tk 25,000Cr Refinance Funds

Only two banks apply for loan in two months of launch

Staff Correspondent | Published: 22:44, Jun 29,2020

 
 

A file photo shows a man walking past a wall containing Bangladesh Bank logo at the central bank headquarters in Dhaka. The Bangladesh Bank has received only two applications for the low-cost refinance loan in two months of the formation of Tk 25,000-crore funds to support implementation of the stimulus packages announced by the government. — AFP photo

The Bangladesh Bank has received only two applications for the low-cost refinance loan in two months of the formation of Tk 25,000-crore funds to support implementation of the stimulus packages announced by the government.

The applying banks are City Bank and IFIC Bank.

City Bank submitted application for refinance loans worth around Tk 13.5 crore against its disbursement of Tk 27 crore in stimulus loans to the cottage, micro, small and medium entrepreneurs.

IFIC Bank has submitted the application for Tk 2 crore in refinance loans against the disbursement of stimulus loans by the bank, an official of the central bank said.

In April this year, the central bank formed two revolving refinance funds worth Tk 25,000 crore to support the stimulus package implementation.

The BB formed Tk 15,000 crore in revolving refinance fund to support the banks with liquidity to implement the Tk 30,000-crore stimulus package meant for the coronavirus outbreak-affected entities in the industry and service sectors.

Another Tk 10,000-crore in revolving refinance fund was formed for the implementation of the Tk 20,000-crore stimulus package announced by the government for the micro, small and medium enterprises, including cottage industries.

The banks will have to pay 4 per cent interest for the refinance loans.

An official of the central bank said that the refinance fund would enhance the banks’ capacity to implement the packages.

Before sanctioning the refinance fund, the central bank would scrutinise the applications to be placed by the banks for approval as soon as possible.

As the banks’ loan recovery has slowed down in the recent months due to the coronavirus pandemic, injection of fund in the banking system from the refinance fund has become very much vital, the BB official said.

The number of applications for the fund would increase in July when the stimulus loan disbursement would get pace as the central bank has targeted to complete the stimulus loan disbursement in two-three months, the official said.

As of June 25, the BB has approved around Tk 3,000 crore in loan proposals of 140 entities, which were placed by different banks for the industries and service sectors affected by the coronavirus pandemic.

Of the sanctioned amount, City Bank received approval on around Tk 300 crore against its proposal for Tk 1.023 crore, while Eastern Bank received approval on Tk 427 crore against its proposal for Tk 981 crore.

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