Regulatory Alerts2020-07-05
Added · Updated
IPFF II Circular No. 01: Amendment of Operations Manual for the Investment Promotion and Financing Facility II Project
The Operations Manual for the Investment Promotion and Financing Facility II (IPFF II) Project is amended to include the Weighted Average Rate of Interest on Deposits (WARID) as an additional benchmark for fixing interest rates on BDT-denominated loans. For fixed-rate BDT loans, the applicable rate is the lower of the GOB T-bill 364-day yield plus 100 basis points or the prevailing WARID plus 100 basis points. For variable-rate BDT loans, the rate is the lower of the GOB T-bill 364-day yield or the prevailing WARID. This amendment, effective from June 30, 2020, applies to Participating Financial Institutions in Bangladesh.
BANGLADESH BANK (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh
IPFF II Project Cell 24th Floor
IPFF II Circular No. 01 Date: July 05, 2020
Chief Executive Officers (CEOs)/Managing Directors (MDs) All Banks and Financial Institutions in Bangladesh Head Office Dhaka Dear Sirs,
Amendment of Operations Manual (OM) for the Investment Promotion and Financing Facility II (IPFF II) Project
Please refer to the IPFF II Circular no. 01 dated March 13, 2018, in terms of which Operations Manual (OM) containing the terms and conditions including operational procedures for availing Financing Facility under Investment Promotion & Financing Facility II Project were circulated.
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IPFF II financing facility is being extended either in USD or in BDT, or in a combination of both USD and BDT, at fixed or variable rates, depending on request by the Participating Financial Institutions (PFIs) and business need of the subproject.
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To make IPFF II Facility loan (in BDT) more attractive to the sponsors, it has been decided that Weighted Average Rate of Interest on Deposits (WARID) will also be considered in addition to GOB T-bill 364-day yield in fixing interest rate for IPFF II Facility Loan in BDT.
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In this regard necessary amendment in the Operations Manual [paragraph 9 (vi)] has been made. Details are explained below:
| Currency | Fixed | Variable |
|---|---|---|
| BDT | GOB T-bill 364-day yield + 100 bp <br> Or <br> Prevailing Weighted Average Rate of Interest on Deposits (WARID) as disclosed on the web page of Bangladesh Bank + 100 bp <br> whichever is lower | GOB T-bill 364-day yield <br> Or <br> Prevailing Weighted Average Rate of Interest on Deposits (WARID) as disclosed on the web page of Bangladesh Bank <br> whichever is lower |
- All other instructions contained in IPFF II Circular No.1, dated March 13, 2018 shall remain unchanged.
Please bring the contents of this circular, effective from June 30, 2020 to the notice of all your constituents concerned.
Sincerely yours,
(Rathin Kumar Paul) Deputy General Manager, Bangladesh Bank & Deputy Project Director, IPFF II Project Phone: 9530230
Phone: +88-02-9530230, +88-02-55665001-6, Fax: +88-02-9530193, E-mail: bb.ipff@bb.org.bd, Website: www.bb.org.bd
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