Banks, NBFIs invited to sign agreements

NEWS DESK

The central bank has invited applications from interested banks by May 14 to sign participatory agreements (PAs) on receiving refinancing facility under the large industries and services sector.

All the scheduled banks have already been asked to send their applications through online to the Department of Off-Site Supervision (DOS) of Bangladesh Bank within the timeframe, officials said.

All the non-banking financial institutions (NBFIs) have also been instructed to submit such applications, they added.

"We'll sign the PAs with the banks and NBFIs separately after receiving the applications," a senior official of the Bangladesh Bank (BB) told the FT on Thursday.

Meanwhile, most of the banks have started preparations to implement the government announced Tk 300 billion stimulus package for large industries and services with using the BB's refinancing scheme, bankers said.

The banks are now maintaining a 'cautious policy' to avert 'future risks' before  sanctioning fresh loans under the stimulus package, they added.

Earlier on April 23, the central bank formed a new refinance scheme worth Tk 150 billion for the large industries and services sector, which are being affected by the coronavirus outbreak.

Under the scheme, lenders will get funds in the form of working capital at 4.0 per cent interest from the central bank, which the end-users will get at 9.0 per cent.

But to avail the refinance facility, banks will have to provide at least 50 per cent of each loan to the industrial and service sector borrowers from their own sources.

"We'll disburse 50 per cent of total loan as refinancing facility to the banks as well as NBFIs concerned after completing formalities," said a senior official at the central bank.

He also said the BB will provide the low-cost refinancing to help the banks for implementation of the government announced Tk 300 billion stimulus package for such industries and services.

Earlier on April 12, the central bank issued a guideline in this connection.

"We're now taking preparations to sign the PAs with the central bank for receiving fund from the scheme," Md Abdul Halim Chowdhury, Managing Director (MD) and Chief Executive Officer (CEO) of Pubali Bank Limited, told the FT.

He also said the Pubali Bank sees the financial stimulus package for large industries and services positively to facilitate the country's overall economic development.

"We're now working to implement such stimulus package with supportive attitude," the senior banker explained.