BB relaxes rules for pre-shipment finance

Bangladesh Bank yesterday further relaxed the rules for availing loans from its pre-shipment refinance scheme to the tune of Tk 5,000 crore in a bid to help exporters smoothly produce their goods.

Exporters are now allowed to avail soft loans from the central bank scheme at 3.5 per cent instead of the previous 5 per cent, according to a notice issued yesterday.

Bangladesh Bank had initially set the interest rate at 6 per cent on end-users but it decreased the rate in phases as clients showed reluctance to get the fund.

Similarly, banks are also permitted to enjoy the loan at 0.5 per cent interest in contrast to the previous 1 per cent.

The central bank declared the scheme, which has a five-year tenure, in April 2020 as part of its move to shield exporters from the business slowdown caused by the coronavirus pandemic.

Banks disbursed Tk 652 crore, or 13 per cent of the scheme's volume, as of April 13 this year.

Under the pre-shipment credit, clients can use the loan to produce exported items before shipping them abroad.

This means exporters can use the money to import raw materials, provide salary to workers, pack exported items and so on.

Refinance scheme means banks firstly have to give out loans to clients, after which they will receive the disbursed amount from the central bank.Mohammad Salauddin Tapadar, a joint director of the central bank, said that Bangladesh Bank had relaxed the criteria of taking loans from the scheme in order to speed up the implementation of the fund.

This will stimulate the exporters to gear up the production as well, he said.