FEPD Circular No. 19: Interest rate on Export Development Fund (EDF) loans

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Web site: www.bangladeshbank.org.bd
FE Circular No. 19 Date: September 29, 2010
All Authorized Dealers of
Foreign Exchange in Bangladesh
Dear Sirs,
Interest rate on Export Development Fund (EDF) loans In terms of paragraph 2 of operational procedure for EDF loan disbursements circulated vide FE Circular No. 25, dated December 22, 2009, EDF loans in US Dollar to manufacturer-exporters are charged interest @ six-month LIBOR +2.5 percent pa. It has been decided that EDF loans to a single manufacturer-exporter up to USD
1.50 million will be charged interest @ six-month LIBOR +1 percent pa. For EDF loans
in excess of USD 1.50 million (from the same AD or from up to two other AD banks), the interest rate will be as before, ie. six-month LIBOR +2.5 percent pa. Manufacturer￾exporters drawing EDF loans from more than one AD bank will be required to furnish information of EDF loan drawings from the other AD banks to enable the ADs to apply the appropriate interest rates. If in any case it is detected later that the lower interest rate has been applied on EDF borrowing in excess of USD 1.50 million, the manufacturer￾exporter will be charged the higher applicable interest rate on the borrowings beyond USD 1.50 million. As for other bank loans, the loan facility from EDF will be admissible only to manufacturer-exporters who are not loan defaulters, including those whose loan accounts have been rescheduled. On the said first USD 1.50 million of EDF, Bangladesh Bank will realize interest from ADs @ six-month LIBOR. The revised interest rates will be effective from 1st January, 2010 and will remain valid till June 30, 2011. Other instructions of FE Circular No. 25/2009 will remain unchanged. Please acknowledge receipt and bring the contents of this circular to the notice of all concerned. Yours faithfully, (Khandaker Abdus Salim) Deputy General Manager Phone: 7120375