The Bangladesh Bank has given its approval to authorized dealer (AD) banks to charge additional one per cent interest on exporters for interim period against loans under Export Development Fund (EDF).
The central bank issued a notice in this regard on Tuesday, saying that the AD banks will be able to impose additional one per cent interest on exporters per annum for the interim period between “import payments from sources of ADs” and “receipts of refinancing from EDF”.
Currently, banks can charge interest to exporters at two per cent against financing under EDF and of the total interest; one per cent goes to Bangladesh Bank.
The BB notice said that the ongoing export trend creates huge demand for input procurements, leading to pressures on EDF loans.
Recently, the size of EDF was increased to $7 billion from $6 billion to meet the growing demand among exporters.
The low interest rate of lending from the EDF also prompted the central bank to increase the size of the fund.
BKMEA Executive President Mohammad Hatem told The Business Post that the central bank move was proactive decision.
He said that previously banks were imposing so high interest rate against loans under EDF for interim period. But now, they could not impose interest rate as they like against EDF loans in interim period, he added.
The additional interest can give comfort to ADs and the cost for one month is 0.08 per cent which is bearable to exporters, said a high official of a private commercial bank.
