Interest rate on pre-shipment fund slashed

Md Joynal Abedin Khan

The interest rate on the pre-shipment fund is slashed to five per cent from six per cent to help export industries combat the economic fallout of Covid-19.

Bangladesh Bank (BB) has asked all scheduled banks to slash one per cent interest rate.

As per the ‘Pre-shipment Credit Refinance Scheme’ under the Bangladesh Bank, the highest celling of the interest rate is fixed at 5 per cent for the industrial clients.

A circular, signed by Md. Nazrul Islam, General Manager of Banking Regulation and Policy Department (BRPD) of the central bank was issued on Monday.

The BB has decided to decrease the interest rate to ensure the low-interest based loan disbursement among the customers and banks to ensure better growth in the export sector, the circular said.

In the case of pre-shipment credit disbursements, lenders can now claim the amount from the BB within a week of delivery of the fund to its clients.

Commercial banks have made disbursements from a pre-shipment credit fund, which was allotted by the government to help businesses survive the Covid-19 fallout.

Fazle Shamim Ehsan, Director Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), hailed the BB move and said that the slashing of the interest rate on the pre-shipment fund will positively impact export growth during the coronavirus pandemic.

“Export trade will be boosted by the moves of the central bank. These initiatives are good. These are very business-friendly decisions," he said.

However, all exporters, attempting to avail the fund from these schemes, should be treated equally, he added.