Home ›› 29 Nov 2022 ›› Front
Industrial enterprises operating in Domestic Processing Areas under Economic Zones (EZs) can now apply for loans in Taka from local banks, on the criteria of not having any sources of income in foreign currency, states a Bangladesh Bank circular.
The circular adds that to further facilitate meeting working capital needs, it has been decided that Type A and Type B industrial enterprises of EZs operating for marketing their products for domestic market only, having no sources of income in foreign currency, are allowed to access to working capital loans in Taka from domestic banking system, subject to observance of all applicable credit norms and prudential parameters.
It was issued by the central bank’s Foreign Exchange Policy Department (FEPD) on Monday. Industry insiders say the new policy will facilitate EZ industries that are producing goods for the domestic market.
A central bank official, on condition of anonymity, told The Business Post, “For example, the Japanese Honda company produces motorcycles in their factories in EZs and sells their products in the local market. So, this company’s domestic factory has no foreign income.
“But such industries need fast loans to run their business smoothly. In this case, getting a loan in USD takes time. The forex crisis is also an ongoing issue. Therefore, the Bangladesh Bank is giving the opportunity to apply for loans in Taka to help these industries run their businesses without any interruption.”
A previous circular mentions that type A and Type B industrial enterprises operating in Economic Zones (EZs) can access short-term foreign currency loans from eligible sources.
Such industries are also allowed to execute transactions in Taka without EXP/IMP procedures, and are permitted to remit payment on account of royalty, technical know-how and technical assistance fees from their Taka accounts respectively.
