Bank loans: Movable assets now allowed as collateral 

The Cabinet has approved the draft of “The Secured Transactions (Movable Property) Act 2022” aiming to expand bank loan accessibility.

The act will make it easier for small and medium enterprises and self-employed people who don’t have enough immovable property to furnish movable assets as collateral for business loans.

The approval came at Wednesday’s cabinet meeting chaired by Prime Minister Sheikh Hasina, said Cabinet Secretary Khandaker Anwarul Islam while speaking to reporters at the Secretariat.

The movable properties include – raw materials for export products, work orders, precious metals such as gold, certificates of deposits in banks and financial institutions, medicinal plants, and fruit-bearing trees.

A well-known company’s share certificate and documents of patent or intellectual property rights can be put as collateral as well.

Besides, furniture, electronic products, software, apps, agricultural products, minerals, vehicles, processed fish and livestock, values of which can be calculated, are on the list of movable assets to be used as collateral.

Currently, only immovable property such as buildings and land are accepted as collateral against bank loans.

Khandker Anwarul Islam said the act was formulated considering the interests of small and mid-level entrepreneurs, adding that “Anyone can take this loan. It will expand the base of investments”   

This is a new law that allows movable assets to be used as equity while applying for bank loans, he said.

Meanwhile, the cabinet also approved two separate draft agreements–one between Bangladesh and Iran to avoid double taxation and the other between Bangladesh and the Maldives to prevent tax evasion.

Through this agreement, both countries will provide special VAT benefits which allow the foreign countries, companies or individuals to pay reduced VAT while sending money to their own country that they received from Bangladesh. But in cases of getting the reduced VAT, there are obligations to get approval from the National Board of Revenue (NBR).