The Bangladesh Bank lowered the interest rate on pre-finance facilities under the Program to Support Safety Retrofits and Environmental Upgrades (SREUP) from 7 per cent to 5 per cent.
The 5 per cent interest will be applicable to all new and existing sub-loans under the project, according to a notice issued by the central bank on Monday.
Bangladesh Bank is implementing the SREUP project with a credit line of €50 million and a donation of €10.29 million from the French Development Agency (AFD), the European Union and the KfW Development Bank.
The interest rate to be paid by Participant Financial Institutions (PFIs) to the central bank for on-lending loans under this project is fixed at 2.5 per cent per annum, as per the central bank's notice.
Investment grants will be sanctioned on a first come, first served basis and this instruction will be effective retrospectively from September 19, 2022.