BRPD Circular Letter No. 32: The responsibilities of Banks to implement financial stimulus packages declared by government to mitigate negative impact of COVID-19 on Economy

Ref No: BRPD Circular Letter No. 32 Banking Regulation and Policy Department Bangladesh Bank Head Office, Dhaka. 18 June 2020 BRPD Circular Letter No. 32 Date: --------------------- 04 Ashar 1427 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh.

Dear Sir,

Subject: Regarding actions to be taken by banks to implement the loan assistance packages declared by the Government of Bangladesh to prevent the negative impact of COVID-19 on the economy.

In order to counter the outbreak of COVID-19 and revive the economic activities, the Government has so far announced a financial stimulus package of 1,03,117 Crore Taka. Among these packages, special funds for export-oriented industrial establishments, agricultural subsidies, distribution of free food items, construction of houses for the homeless, and subsidies on suspended interest by commercial banks, among other sectors, are being financed from the government's revenue account. For the implementation of packages of 20,000 Crore Taka and 30,000 Crore Taka respectively for providing working capital facilities to affected cottage, micro, small and medium enterprises and industrial and service sector establishments, the banks' own funds will be used, against which the government will provide interest subsidies. Furthermore, to maintain the liquidity position of the country's banking sector normal, the Bangladesh Bank has launched pre-shipment credit, refinancing schemes for various sectors including low-income professional farmers/micro-entrepreneurs and the agricultural sector, against the aforementioned working capital facilities.

2. The Government of Bangladesh has already taken various programs including financial assistance packages considering priority sectors to prevent the negative impact of COVID-19 on the economy, most of which are being implemented through the banking system. For the smooth implementation of these programs, it is essential that all levels of bank staff have a comprehensive understanding of the packages formulated by the Government and the Bangladesh Bank. Furthermore, it is extremely necessary to involve various functions and employees of the bank's head office as well as all branches and sub-branches for the proper implementation of the packages. Otherwise, the implementation of the packages will not reach the desired level, which is not desirable. In this context, the following instructions are to be followed for the implementation of the aforementioned stimulus packages:

a) Measures must be taken to verify and rapidly approve/distribute loans/investments with minimal delay for loan/investment applicants affected by the outbreak of COVID-19. If providing loans/investments is not possible in accordance with applicable laws and regulations, measures must be taken to inform the applicant about this matter with minimal delay;

b) An independent 'Help Desk' must be established at every branch to assist loan/investment applicants, and information regarding the financial stimulus package must be displayed in a location easily visible;

c) The monitoring program for the stimulus packages will be implemented under the direct supervision of the bank's Chief Executive Officer;

d) In this difficult situation in the country, the role of bank staff and employees is paramount and irreplaceable in keeping the economic engine running. Without the active participation of bank staff and employees, it will not be possible to turn around the country's economy and achieve the desired GDP target. In this context, banks are instructed to take all necessary measures to motivate bank staff and employees so that they can play a leading role in implementing the loan stimulus packages declared by the Bangladesh Bank.

3. These instructions are issued under the powers conferred by Section 45 of the Companies Act, 1991.

These instructions will take immediate effect.

Yours faithfully, Md. Nazrul Islam General Manager Phone: 9530252