Regulatory Alerts2021-09-30
Added
BRPD Circular Letter No. 44: Refinance Scheme for Pre-Shipment Credit to Mitigate the Crisis due to Novel Coronavirus
The Bangladesh Bank replaces the previous instruction regarding the Refinance Scheme for Pre-Shipment Credit by extending the eligibility for multiple loans under the 3-year, BDT 50 billion fund to all customers, regardless of the loan tenure. Participating banks are now authorized to refinance loans with any tenure up to a maximum of 180 days, which must be repaid in a lump sum with interest at maturity. This amendment aims to prevent disruption to export activities and foreign exchange inflows for affected industries as the initial one-year implementation period expires.
BRPD Circular Letter No. 44: Refinance Scheme for Pre-Shipment Credit to Mitigate the Crisis due to Novel Coronavirus.
Date: ----------------- 15 Ashwin 1428
To: Managing Director/Chief Executive All Scheduled Banks operating in Bangladesh.
Dear Sir,
Refinance Scheme in the Pre-Shipment Credit Sector to Mitigate the Crisis Caused by the Novel Coronavirus.
Reference is invited to BRPD Circular No. 09 dated April 13, 2020, and BRPD Circular Letter No. 38 dated July 22, 2020, on the subject cited above.
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Through BRPD Circular No. 09/2020, the Bangladesh Bank established a Refinance Fund of BDT 5,000 (Five Thousand) Crore with a tenure of 3 (three) years, with the objective of maintaining the momentum of foreign exchange inflows and authorized activities by providing pre-shipment loan assistance to export-oriented industrial units affected by the COVID-19 pandemic. Clause No. 11 of the said Circular (replaced by BRPD Circular Letter No. 38/2020) provided instructions that a customer may be distributed loans under the said Refinance Fund multiple times with different tenures, up to a maximum of 1 (one) year. Since the tenure of the fund has now exceeded one year, many customers are not receiving loan facilities under the fund, thereby disrupting their export activities. Consequently, the objective of the fund, which was established to revive authorized activities and maintain the momentum of foreign exchange inflows due to the COVID-19 pandemic, may be hindered.
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In the aforementioned context, to maintain progress in the implementation of the "Refinance Scheme in the Pre-Shipment Credit Sector" and to achieve the objective of maintaining export activities, foreign exchange inflows, and authorized activities, Clause No. 11 of BRPD Circular No. 09 (replaced by BRPD Circular Letter No. 38/2020) regarding the policy of the said scheme is hereby replaced as follows:
"Clause No. 11. Tenure of Loan: A customer may be distributed loans under the said Refinance Fund multiple times with different tenures within the tenure of the fund, which is 3 (three) years. Regardless of the customer's loan tenure, the Bangladesh Bank will refinance the participating bank with a maximum tenure of 180 days (six months), which will be repayable in a lump sum with interest at the end of the tenure."
- In addition, other instructions of BRPD Circular No. 09/2020, BRPD Circular Letter No. 38/2020, BRPD Circular Letter No. 42/2020, and BRPD Circular Letter No. 26/2021 shall remain unchanged.
These instructions shall take effect immediately.
This Circular is issued under the powers conferred by Section 45 of the Bank Companies Act, 1991.
Yours faithfully,
(Maksuda Begum) General Manager Phone: 9530252