BRPD Circular No. 04: Refinance Scheme to Support Cinema Hall Owners

Department of Banking Regulation and Policy Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. February 14, 2021 BRPD Circular No.- 04 Date: -------------------- 01 Falgun, 1427 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh. Dear Sir, With reference to the formation of a special refinance scheme by Bangladesh Bank to provide low-interest long-term loans/investments to cinema hall owners for the purpose of renovating and modernizing existing cinema halls and constructing new cinema halls, with the aim of reviving the lost heritage of the film industry. The contribution of cinema is immeasurable in maintaining the timeless culture, independence, and spirit of the Liberation War of Bangladesh. To create a renaissance in the film industry through the use of modern technology, creating an investment-friendly environment, and enhancing the skills of artists and artisans, the Honorable Prime Minister Sheikh Hasina declared cinema as an industry on April 3, 2012. The role of healthy entertainment in building a healthy nation is undeniable. Cinema and cinema halls are the largest medium of the entertainment world and the film industry primarily develops around them. In the nineties, there were nearly 1,400 cinema halls in this country. However, due to various obstacles, this number is gradually decreasing. It is necessary to renovate existing cinema halls and construct new cinema halls of modern standards to provide healthy entertainment to the movie-loving audience of the country. In this regard, if low-interest long-term loans/investments are provided to cinema hall owners, they will be able to construct new cinema halls as well as renovate existing halls and add modern equipment. Considering all aspects, Bangladesh Bank has formed a refinance scheme of Tk 1,000.00 (One Thousand) Crore for the distribution of loans in favor of cinema hall owners. The following instructions will be followed in the operation of this scheme:

1. Title: Refinance Scheme for providing term loan/investment facilities to cinema hall owners.
2. Sector: Refinance facilities will be provided by Bangladesh Bank against the authorization of scheduled banks for the purpose of renovating and modernizing existing cinema halls, purchasing related machinery/parts/technology, and constructing new cinema halls. Subject to compliance with other provisions of this policy, both existing cinema halls in various shopping complexes and newly constructed cinema halls will be eligible for loan/investment facilities under the said refinance scheme. However, no expense for working capital will fall under the scope of refinance facilities. Furthermore, any loan taken under this scheme cannot be used in any way to pay off or adjust any other loan/investment.
3. Source and Amount of Fund: Own funds of Bangladesh Bank. The amount of the scheme is Tk 1,000.00 (One Thousand) Crore. Tk 500.00 (Five Hundred) Crore will be distributed in the first phase. After ensuring the proper utilization of loans/investments distributed in the first phase, Tk 500.00 (Five Hundred) Crore will be distributable in the second phase.
4. Loan/Investment Limit: Following banking regulations, the bank that reasonably authorizes each customer's eligibility for loan/investment facility for each cinema hall will determine it. However, it shall not exceed Tk 5.00 (Five) Crore against each cinema hall in any way.
5. Interest/Musharaka Rate: Participating scheduled banks in this scheme can avail refinance facilities from Bangladesh Bank at a fixed rate of 1.5%. The bank will authorize customers at an interest/Musharaka rate of 5.0% in metropolitan areas and 4.5% outside metropolitan areas.
6. Tenor of Loan/Investment: The loan/investment availed under the refinance facility will be repaid by the customer within a maximum tenor of 8 (eight) years (1 year + 7 years) in equal monthly/quarterly installments along with a 1 (one) year grace period. Page 2/2

-2- 7. Participating Banks: All scheduled banks operating in Bangladesh will be considered eligible to avail this refinance facility. Banks interested in availing refinance must sign a Participation Agreement with the Department of Off-Site Supervision of Bangladesh Bank. 8. Timeframe for Availing Refinance Facility: Customer-wise loan/investment distribution under this scheme, participating banks must apply to Bangladesh Bank to avail refinance facilities by March 31, 2022. 9. Fund Management: Operational activities of this scheme will be carried out by the Department of Off-Site Supervision of Bangladesh Bank, Head Office. The procedure for applying for loans/investments and necessary documents will follow the instructions provided by the Department of Off-Site Supervision. 10. Repayment Method: a. Along with a 1 (one) year grace period from the date of availing refinance, the participating bank will repay the entire loan/investment along with interest/Musharaka in quarterly installments within a maximum time of 8 (eight) years. If there is delay in repaying the refunded amount along with interest/Musharaka to Bangladesh Bank within the fixed time, the relevant bank's current account held with Bangladesh Bank will be debited and recovered/adjusted. b. The claim of Bangladesh Bank regarding customer-wise loan/investment recovery cannot be offset. c. The authorizing bank will ensure the proper use of funds distributed under this scheme. If the funds of this loan/investment are used for any sector other than renovating existing cinema halls, modernization, purchasing related machinery/parts/technology, and constructing new cinema halls, Bangladesh Bank will recover a lump sum amount from the relevant bank consisting of an additional 2% interest/Musharaka over the fixed interest/Musharaka rate on that amount. 11. Other Provisions: a. Cinema hall owners will apply for loans/investments to scheduled banks, and participating banks will approve/distribute loans/investments subject to the availability limit of funds from Bangladesh Bank. b. In selecting loan/investment recipients, approving loans/investments, accepting necessary collateral, executing documents, determining debt-equity ratio, etc., participating banks will take decisions based on banker-customer relationships while following applicable laws and regulations. c. Participating banks will ensure regular monitoring of loan/investment distribution, recovery, and proper use. However, Bangladesh Bank may occasionally conduct inspection activities to ensure the proper use of loans taken by bank branches and borrowers under this activity. d. In the aforementioned refinance cases, participating banks will supply necessary information, papers, and copies of documents to Bangladesh Bank from time to time upon its demand. Bangladesh Bank may make necessary additions, deletions, and amendments to the aforementioned provisions regarding refinance from time to time. These instructions are issued under the authority granted in Section 45 of the Bank Company Act, 1991. These instructions will come into force immediately. Yours faithfully, (Md. Nazrul Islam) General Manager Phone: 9530252.