Home ›› 27 May 2022 ›› Front
The Bangladesh Bank has formed a Tk 2,000 crore refinance scheme for developing the country’s shipbuilding industry.
Clients can get loans at a 4.5 per cent interest rate under the scheme, said the central bank’s Banking Regulation and Policy Department in a circular on Thursday.
The circular said clients can get loans as per their needs based on the bank-client relationship. But it said nothing about the maximum loan limit.
The loan application deadline is June 30, 2024.
Mizanul Islam Azad, the owner of Ebadee Petro Carriers, welcomed the central bank’s move. He told The Business Post the loan facility would benefit shipbuilders.
“We have been waiting for long for such a scheme. Hopefully, there will be no obstacles to getting loans.”
The circular said depending on the needs of clients, term loans can be taken out for 12 years and the grace period will be three years.
No loans are permitted for constructing dockyards, land purchase, or lease. Loans taken out from the scheme cannot be used to repay other loans. Besides, defaulters are not eligible for loans under the scheme.
Taking out working capital loans is also permitted under the scheme for a year. If business is good, loans can be renewed for a maximum of three years.
All scheduled banks will be able to participate in the scheme. For this, an agreement has to be made with the central bank’s Department of Off-Site Supervision.
Banks will be able to borrow from the central bank at a 1 per cent interest rate, and they will then lend to clients at 4.5 per cent, the circular said.
It said banks need to regularly monitor the loans. In case of any irregularities, the Bangladesh Bank will impose an additional penalty of 2 per cent on the loans.
Besides, the circular said the government formulated the Shipbuilding Industry Development Policy 2021 for the shipbuilding industry’s sustainable development, increasing export earnings and employment, and gradually reducing import dependence for socio-economic development.
In light of the policy, the Bangladesh Bank formulated the refinance scheme to provide loans at relatively low interest rates, the circular added.
The shipbuilding development policy says the government has set a target to raise export earnings to $4 billion in this sector by 2025.
Bangladesh started exporting ships in 2008. As per the industries ministry, Bangladesh earned $180 million by exporting 40 ships in the last few years.
Besides, employment in this sector will be increased to one lakh by 2025. More than 30,000 workers work in this sector at present.
