The Bangladesh Bank on Tuesday approved issuance of 524.5 million euros in loan from its foreign currency reserve to state-owned Sonali Bank against government guarantee to be lent to the Payra Port Authority.
The BB granted the loan on Monday at a board meeting presided over by its governor Fazle Kabir, a senior official of the central bank confirmed New Age after the meeting.
Under the approval, the BB would disburse loans to Sonali Bank in 12 tranches and each of the tranches would be disbursed upon confirmation on proper utilisation of its preceding instalment, said the BB official, who was also present at the meeting.
The fund would solely be used for import purposes in the implementation of the Rabnabad Channel Capital and Maintenance Dredging project of the Payra Port Authority.
In total, the central bank would provide Sonali Bank with 524,561,000 euros (equivalent to Tk 5,293.44 crore) from the country’s foreign exchange reserve.
The BB official said that the central bank would follow the same model to issue loans to the Payra Port Authority as was followed in issuing loan to the country’s national carrier, Biman Bangladesh Airlines, for the purchase of aircrafts.
In 2019, Biman Bangladesh received $315 million (equivalent to Tk 2,655.92 crore) in credit from the central bank’s reserve through Sonali Bank for the purchase of two new Boeing 787-9 aircrafts, known as Dreamliner, with five years of grace period to start instalment payment.
Former finance minister AMA Muhith mooted the idea of creating a fund with the reserve for development projects in 2016.
But the idea was set aside amid criticism that there were risks of misuse as the money would be taken for megaprojects undertaken mostly on political considerations.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Tax