Bangladesh Bank has instructed commercial banks to provide loan facilities to export-oriented industries to cover salaries and allowances for August.
This directive has come in response to recent disruptions caused by political instability and global economic conditions, which have affected the timely repatriation of export values.
In a circular issued on Sunday, the central bank emphasized that these loans should be extended based on the banker-customer relationship and an assessment of the customer’s financial capability. Banks may exceed the current capital loan limit if necessary.
The circular specifies that the prevailing market interest rate will apply to these loans, and the loan amount should not exceed the average salary and allowance payments made by the borrower over the past three months.
Furthermore, Bangladesh Bank has instructed that scheduled banks directly disburse salaries and allowances for August into employees’ accounts, including Mobile Financial System accounts, while ensuring that the total debt, including negotiable debt, remains within the Single Borrower Exposure Limit.
Loans may be repaid in installments over a maximum period of one year, with a grace period of three months, in the form of a term loan. No additional interest, profit, fee, or charge beyond the regular interest rate will be applied to these loans.
To qualify as an active export-oriented industry, an establishment must export at least 80 percent of its total production and have paid workers’ salaries from May 2024 through July 2024.
Certification of operational and export-oriented status must be obtained from relevant trade organizations, such as BGMEA or BKMEA.
Bangladesh Bank stated that recent political instability and global economic conditions have impeded the production and timely export repatriation of export-oriented industries, making it challenging to pay employees.
Financial assistance is deemed essential to maintain export trends and preserve production capacity, BB said.