The Bangladesh Bank has established a fund of two billion taka for the development of the country’s shipbuilding industry. This fund has been established under the Shipbuilding Industry Development Policy-2021. The Bangladesh Bank issued a statement on this matter yesterday.
According to the statement, the central bank has said that this fund will provide loans for the development, management, and growth of the shipbuilding industry, including shipbuilding companies and local industrial institutions. Loans from this fund will be available at a maximum interest rate of 4%. Banks can also avail a refinancing facility at a 1% interest rate from the Bangladesh Bank.
However, the central bank has also imposed several restrictions on the distribution of this loan. It has stated that no one can take out a loan from this fund for the construction of a dockyard, purchasing or leasing land. The loan cannot be used to repay any other loan or its interest.
In terms of managing the fund, participating banks and all operational details in Bangladesh will be reviewed to facilitate the fund’s reorganization. Banks interested in participating in the restructuring will need to sign an agreement with the Bangladesh Bank.
It has been stated in the advertisement that banks will be able to provide loans for a maximum period of 12 years (3 years grace period included) according to the customers’ demand. In this case, the bank will take out a short-term revolving loan from its own reserve for one year, and according to the prevailing rules, the bank will give the loan based on its relationship with the customer, and if the business transaction is satisfactory, it can be renewed. However, through renewal, a customer can avail of the benefits declared within the scope of this reserve for a maximum of three years. Bangladesh Bank may reduce or increase the time of this reserve’s benefits declaration in consideration of the necessity of revolving capital loans.
The deadline for submitting applications for restructuring and applying for a loan or investment within the scope of this fund is June 30, 2024, and is favorable to certain customers. The application for eligibility of the fund must be submitted to the Bangladesh Bank by that date.
