BRPD Circular No. 16: Stimulus Package as Working Capital Loans/Investments to Pay Salaries-allowances for the Workers of Hotel/Motel/Theme Park of Tourism Sector

Banking Regulation and Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref No: BRPD-Circular-16
BRPD Circular No. 16
15 July 2021
Date: ----------------
31 Asharh 1428

To,
Managing Directors / Chief Executives
All Scheduled Banks operating in Bangladesh.

Dear Sir,

Regarding the provision of 1,000 crore Taka working capital loan/investment facility at 4% interest through the banking system to pay salaries and allowances for the workers of hotels/motels/theme parks in the tourism sector.

Due to the current infection of Novel Coronavirus (COVID-19) and the restrictions imposed as a result, to provide financial assistance in favor of the affected low-income people, the Honorable Prime Minister announced a 1,000 crore Taka financial support package on July 13, 2021, to provide working capital loan assistance through the banking system at 4% interest for paying salaries and allowances for the workers of hotels/motels/theme parks in the tourism sector. Under the said package, commercial banks will provide working capital loan/investment facility through the banking system for a period of 1 (one) year to hotels/motels/theme parks affected by the outbreak of the coronavirus, based on the bank-customer relationship. To keep the customer interest/profit rate affordable, the interest/profit rate fixed against the loan/investment under the said package will be maximum 8 (eight) percent. Of the said interest/profit, 4 (four) percent will be paid by the borrowing institution, and the remaining 4 (four) percent will be provided as a subsidy by the government. In this regard, the following instructions are to be followed for the easy provision of loan/investment facility under this package:

2. Loan/Investment Management:
   a) In the approval and distribution of loans/investments under this package, the existing policies of Bangladesh Bank as well as the bank's own loan/investment policies are to be followed; b) The interest/profit share provided as a subsidy by the government will be provided through the Accounts and Budgeting Department of the Head Office of Bangladesh Bank. The program for receiving the repayment of the said subsidy interest-profit must be carried out by the Head Office/Principal Office of the concerned bank.

3. Limit of Bank Loan/Investment:
   Each bank will determine its own limit and start the loan/investment program based on the said limit. The loan/investment limit determined by the bank must be sent to the Banking Regulation and Policy Department by July 25, 2021, in accordance with 'Annex-A' (along with soft copy via email: brpd@bb.org.bd and dos@bb.org.bd). After receiving information regarding the limit from the banks, the Banking Regulation and Policy Department will determine the final limit based on demand and fund availability, inform the banks, and the banks will operate the loan program accordingly.

4. Nature and Term of Loan/Investment:
   The loan/investment provided under this package will be referred to as Working Capital Loan/Investment for Tourism Sector (WCL-2) and must be reported in CL-2 statement. The term of each loan/investment will be maximum 1 (one) year. If the business transactions of the loan/investment receiving institution are satisfactory, the loan/investment facility can be renewed based on the bank-customer relationship. However, the subsidy for interest/profit on the loan/investment provided under the discussed package will be payable for 1 (one) year.

5. Interest/Profit Rate:
   The interest/profit rate under this package will be maximum 8 (eight) percent. Of the interest/profit imposed on the provided loan/investment, 4 (four) percent must be paid by the loan/investment receiving institution, and the remaining 4 (four) percent will be provided as a subsidy by the government to the concerned bank.

6. Loan/Investment and Subvention Eligibility:
   a) The hotels/motels/theme park business institutions that have not previously received any benefit from the stimulus packages announced by the government and Bangladesh Bank can avail themselves of the loan/investment facility under this package to pay salaries and allowances for their workers; b) Applicants wishing to avail the loan/investment can avail the facility under this package through the bank through which they are currently transacting. Institutions transacting through multiple banks can apply through any one of the transacting banks. However, in this case, a certificate confirming that they have not availed loan/investment facility through any other bank must be submitted; c) If the part of the interest/profit imposed on the distributed loan/investment under this package (4 percent) paid by the borrower is paid by the 10th of the following month on a quarterly basis (March, June, September, and December), the bank will be entitled to the remaining 4 (four) percent as a subsidy against the interest/profit from the government. If the bank fails to receive the government subsidy due to the borrower not paying the interest/profit on time, the borrower must bear the said 4 (four) percent interest/profit.

7. Process for Repayment of Interest/Profit Share against Subvention for Loan/Investment:
   a) The bank must apply to the Accounts and Budgeting Department of Bangladesh Bank in accordance with 'Annex-B' by the 15th of the following month after the end of each quarter (March/June/September/December) to receive the subsidy against the loan/investment provided for the said quarter. Along with the application, the bank must submit a copy of the Trade License/Approval from the concerned government office for operating the business as a hotel/motel/theme park in the tourism sector, a list of workers whose salaries and allowances are being paid through the loan/investment taken under this package, and the sanction letter of the concerned bank; b) Upon receiving such application, the Accounts and Budgeting Department will verify it as soon as possible and inform the bank by depositing the interest/profit share payable as a subsidy into the current account of the concerned bank kept with Bangladesh Bank.

8. Information Submission:
   Information regarding the loan/investment provided by the bank under this package must be sent to the Banking Regulation and Policy Department within 3 (three) working days of the next 15th and last day of each month (semi-monthly basis) in accordance with 'Annex-C'.

9. Refinancing Facility:
   To ensure liquidity for the bank to provide loans/investments under this package, 50 (fifty) percent of the distributed loan/investment can be availed as a refinancing facility from Bangladesh Bank. The interest/profit rate against the said refinancing facility will be 4 (four) percent, and the term will be 1 (one) year from the date of availing the refinancing facility. Banks wishing to avail refinancing under this package must sign a participatory agreement with the Department of Offsite Supervision (DOS). In addition, operational programs will be carried out by DOS, and necessary instructions regarding this will be provided by DOS.

10. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991.
    These instructions will come into force immediately.

Yours faithfully,

Annexures: As per details.

(Md. Ali Akbar Farazi)
General Manager
Phone: 9530252

Annex-A
Demand Form for Providing Loan/Investment Facility in the Tourism Sector under BRPD Circular No. 16/2021

Name of the Bank:
(In Taka)

Sr.	Total Status of Loans/Investments Provided in Favor of Hotels/Motels/Theme Parks (Based on 31/12/2020)	Total Amount of Demand for Distribution of Loans/Investments under the Discussed Package in Favor of Hotels/Motels/Theme Parks	Remarks
(1)	(2)	(3)	(4)

Signature
Name and Designation

Contact Person for Annex-A:
Name:
Designation:
Office Phone No:
Mobile Phone No:
E-mail:

Annex-B
Required Information for Receiving Interest/Profit Subvention against Loans/Investments Provided in the Tourism Sector under BRPD Circular No. 16/2021

---------------- Date Based
(Based on the last date of the quarter [31 March/30 June/30 September/31 December] for which the subsidy application is made)

Name of the Bank:
(In Taka)

Sr.	Name of Loan/Investment Receiving Institution	Name of Owner	NID/Trade License No.	TIN	Date of Loan/Investment Distribution	Date of Expiry of Loan/Investment Term	Amount of Distributed Loan/Investment	Status of Loan/Investment (Based on ---- Date)	Total Amount of Interest/Profit Imposed at 4% Rate	Total Amount Paid by Customer	Total Amount of Subvention Applied at 4% Rate (Against Distributed Loan/Investment)	Total Amount Repaid as Interest/Profit Subvention by Bangladesh Bank
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)

Signature
Name and Designation

Contact Person for Annex-B:
Name:
Designation:
Office Phone No:
Mobile Phone No:

Annex-C
Statement of Information Concerning the Stimulus Package Formed for the Tourism Sector under BRPD Circular No. 16/2021

Name of the Bank:
(In Taka)

Sr.	Name of Loan/Investment Receiving Institution	Amount of Loan/Investment Distributed in the Concerned Semi-Monthly Period	Accumulated Status of Loan/Investment in Favor of the Concerned Customer (Based on Last Quarter)	Number of Workers Benefited under the Discussed Package	Remarks
(1)	(2)	(3)	(4)	(5)	(6)

Signature
Name and Designation

Contact Person for Annex-C:
Name:
Designation:
Office Phone No:
Mobile Phone No:
E-mail: