Refinance Scheme for the Development of ICT Sector

Bangladesh Bank
Head Office
Motijheel, Dhaka-1000 Sustainable Finance Department Bangladesh.
Website: www.bb.org.bd
SFD Circular No.-04 Date:
Managing Director/Chief Executive Officer
All Scheduled Banks and Financial Companies operating in Bangladesh Dear Sir, Refinance Scheme for the Development of Information and Communication Technology Sector.
To achieve Sustainable Development Goals (SDGs), build a modern technology-dependent Bangladesh, implement the Export Policy 2024-27 and Climate Prosperity Plan 2022-2041 declared by the Government of the People's Republic of Bangladesh, and as part of the Eighth Five-Year Plan, the development of the Information and Communication Technology (ICT) sector is essential for achieving high growth, forming an ICT-dependent Bangladesh, developing human resources suitable for the twenty-first century, and gaining competitive advantages and addressing challenges arising from the Fourth Industrial Revolution. In this context, to bring about Export Diversification in export-oriented products, achieve skill development and enhance competitive capacity in the ICT sector, as well as improve the investment environment in this sector, ensure technical assistance for the widespread application of information and communication technology, create employment, and develop market structure, it is crucial to expand proper credit flow in this sector. For this purpose, Bangladesh Bank has formed a BDT 1,000 (one thousand) crore refinance fund titled 'Refinance Scheme for the Development of Information and Communication Technology Sector' for establishing industrial units in the information and communication technology sector, innovating, producing, developing, assembling, and processing related services and products, and expanding export trade. The policy guidelines related to the said refinance fund are as follows:

1. Title: 'Refinance Scheme for the Development of Information and Communication Technology Sector' (Refinance Scheme for the Development of ICT Sector)

2. Objective of Fund Formation: To achieve skill development and competitive capacity enhancement through sustainable and modern technology use in the information and communication technology sector.

3. Beneficiaries: High-priority ICT sector and other potential ICT-related sectors/sub-sectors under government development plans. Additionally, products and services produced in Bangladesh Hi-Tech Park/Software Technology Park and women entrepreneurs in the ICT sector will receive refinance facilities on a priority basis.

4. Refinanceable Technologies/Projects/Initiatives/Activities:
   4.1) Internet of Things (IoT); 4.11) Fintech and Embedded Finance; 4.2) Software Development; 4.12) Data Analytics; 4.3) Hardware and Networking; 4.13) E-commerce; 4.4) Business Process Outsourcing (BPO); 4.14) Blockchain; 4.5) IT Enabled Product and Services; 4.15) Drone Technology; 4.6) Artificial Intelligence (AI); 4.16) Semiconductor Designing, Production and R&D; 4.7) Robotics; 4.17) EdTech; 4.8) 3D/4D Printer and Fabrication Lab; 4.18) HealthTech; 4.9) Cloud Computing; 4.19) Augmented Reality (AR) and Virtual Reality (VR); 4.10) Cyber Security; 4.20) Quantum Computing; 11 Ashar 1433 25 June 2026

5. Participating Financial Institutions (PFI): All interested listed banks and financial companies must sign a Participation Agreement with Bangladesh Bank (Director, Sustainable Finance Department, Bangladesh Bank, Head Office, Dhaka) to receive refinance facilities under this fund. Banks and financial companies bound by this agreement will be considered Participating Financial Institutions (PFIs). Additionally, all PFIs must comply with instructions issued by Bangladesh Bank from time to time through circulars/circular letters.

6. Fund Size: BDT 1,000 (one thousand) crore (revolving).

7. Fund Source: Bangladesh Bank's own source.

8. Refinance Facility Tenure: 3-10 years (with a maximum 06 months grace period).

9. Loan Type: Term Loan/Investment in local currency or a combination of Term and Working Capital Loan/Investment.

10. Interest/Profit Rate:
    10.1. Interest/profit rate payable by PFI to Bangladesh Bank will be 1%; and
    10.2. Interest/profit rate payable by customer to PFI will be a maximum of 4%.

11. Interest/Profit Calculation and Debt-Equity Ratio:
    11.1. Interest/Profit Calculation: Fixed Principal Method will be followed for calculating interest/profit and recovering principal against refinance facilities under this scheme. Similarly, Participating Financial Institutions must also follow the Fixed Principal Method for recovering loans/investments from customers;
    11.2. Debt-Equity Ratio: Before applying for refinance under this fund, the customer's equity contribution must be ensured. In this case, all PFIs will determine the debt-equity ratio based on the PFI-customer relationship in light of their loan/investment (credit/investment policy) policies. The debt-equity ratio must be a minimum of 80:20. However, no single borrower will be eligible for more than BDT 50 (fifty) crore loan facility under this fund.

12. Eligibility for Refinance Facility at Customer Level:
    12.1. Refinance facilities will be provided against term loans/investments (Term loan/Investment) or a combination of term and working capital loans/investments (Working Capital) taken in local currency from PFIs for innovation, production, development, assembly, processing, and modernization of ICT sector-related products/services and technologies. In the case of combined refinance facilities for term and working capital loans/investments, a maximum of 40% of the working capital loan/investment will be considered. Expenses for consulting services related to ICT products/services and technologies will not be covered under this refinance facility;
    12.2. The maximum refinance limit will be equal to the loan/investment disbursed by the PFI or determined by Bangladesh Bank based on the financial capacity, production capacity, and actual cost of the relevant technology/project/initiative/activity, but it will not exceed BDT 50 (fifty) crore in any case;

12.3. Applications for refinance facilities against loans/investments provided to defaulted customers will not be considered. Before applying for refinance facilities, PFIs must collect updated CIB reports of the relevant customer and their related institutions and ensure that the borrower is not a defaulter;
12.4. PFIs may apply for refinance facilities against acquisition of loans/investments for logical reasons, but if the relevant loan/investment was previously classified or subsequently rescheduled, restructured, or written off, it will not be considered for refinance; and
12.5. In cases of delayed commencement of technology/project/initiative/activity financed by PFIs for logical reasons, PFIs may apply for refinance facilities against their financing within a maximum of 06 (six) months after the commencement of the relevant technology/project/initiative/activity.
13. Eligibility for Refinance Facility at PFI Level:
13.1. All state-owned banks and financial companies can provide loans under this refinance facility;
13.2. Private and foreign banks and financial companies must comply with the following conditions:
(a) The classified loan/investment rate will not exceed 10%; however, based on the customer's financial capacity, business efficiency, and risk assessment, up to a maximum of 15% may be considered by Bangladesh Bank on a case-to-case basis; (b) Capital Adequacy, Provision Maintenance, Cash Reserve Ratio (CRR), and Statutory Liquidity Ratio (SLR) must be maintained at rates determined by Bangladesh Bank;
13.3. Instructions regarding single borrower/group and large loan/investment limits, including those mentioned in the Bank-Company (Amendment) Act 2023 and the Financial Company Act, 2023, and all related circulars/circular letters issued by Bangladesh Bank from time to time, must be followed; and
13.4. All policies related to loan disbursement and risk management issued by Bangladesh Bank from time to time must be ensured.
14. Schedule of Charges: For determining the Schedule of Charges for loans/investments (excluding interest/profit rates mentioned in Article 10), instructions issued by Bangladesh Bank's Banking Regulation and Policy Department and Finance Company Regulation and Policy Department from time to time will be complied with. No hidden expenses or other indirect charges/fees/commissions can be imposed for refinance. However, any taxes/duties imposed/levied by the government, where applicable, will be recoverable in due course.
15. Refinance Application Process:
15.1. PFIs must submit an application signed by the Managing Director/Chief Executive Officer or his/her nominated officer, along with the relevant documents mentioned in Article 18, to the Director, Sustainable Finance Department, Bangladesh Bank, Head Office, Dhaka, or through e-Refinance Software;
15.2. Applications must be submitted to Bangladesh Bank within 90 (ninety) days after the disbursement of the loan sanctioned by the PFI under the refinance facility; and

15.3. The refinance facility will be considered equal to the loan/investment disbursed by the PFI under this fund or the estimated value/project cost by a consulting firm registered/approved by the relevant ministry/directorate/department/institution of the government for the information and communication technology sector. However, before approving the refinance facility, the relevant technology/project/initiative/activity will be pre-inspected by the Sustainable Finance Department. In this case, the refinance facility limit will be determined after reviewing the inspection report, submitted application, and related documents.
16. Refinance Recovery Process:
16.1. Refinance facilities taken by PFIs will be recoverable in quarterly installments according to a specific repayment schedule. In this case, the repayment schedule for refinance facilities provided to PFIs will be prepared by Bangladesh Bank, and the repayment schedule for loans/investments disbursed to customers must be prepared by PFIs and submitted to Bangladesh Bank;
16.2. Installments due on the specified date according to the repayment schedule will be recovered by debiting the current account of the relevant PFI maintained with Bangladesh Bank. PFIs must maintain sufficient funds/balance in their current accounts on the specified date. In this case, if installments cannot be recovered on time due to insufficient funds/balance, Bangladesh Bank will recover the relevant installment by imposing additional penal interest (at bank rate) on the subsequent recoverable installment;
16.3. This refinance facility is adjustable before the specified period. In this case, upon full adjustment of the relevant loan/investment by the customer, PFIs will inform Bangladesh Bank by repaying the entire refinanced amount in a lump sum along with all related information/statements. PFIs cannot collect any charges/fees/commissions from customers for adjusting the relevant loan/investment before maturity; and
16.4. All responsibility for recovering loans/investments disbursed at the customer level will rest with the PFI. In this case, the repayment of refinance taken from Bangladesh Bank cannot be linked in any way to the recovery of loans/investments at the customer level.
17. Reporting and Monitoring:
17.1. Participating banks and financial companies must submit updated statements regarding loan/investment disbursement and recovery on a quarterly basis, signed by the Managing Director/Chief Executive or his/her nominated officer, according to the prescribed format (Annex-A), within 15 (fifteen) days after the end of the relevant quarter (statements for March, June, September, and December must be submitted before the 15th of April, July, October, and January respectively) to the Director, Sustainable Finance Department, Bangladesh Bank. PFIs that have not availed refinance facilities will submit a nil statement;
17.2. PFIs must ensure the proper utilization of disbursed loans/investments. To ensure fund utilization, Bangladesh Bank will conduct on-site inspections and verification of the relevant technology/project/initiative/activity and all related documents after the approval of the refinance facility, as needed;
17.3. If, during inspection or at any time thereafter, it is discovered that the disbursed loan/investment has not been properly utilized, or if a customer benefiting from this fund is subsequently classified as adverse, or if any condition of the agreement is violated, Bangladesh Bank will cancel the refinance facility and debit the entire refinanced amount, including accrued interest/profit and penal interest (at bank rate), from the current account of the relevant PFI in a lump sum. Additionally, applicable punitive measures will be taken in accordance with the Bangladesh Bank Order 1972, Bank-Company (Amendment) Act 2023, and Financial Company Act, 2023.

18. Documentary Checklist:
    18.1. Participating banks and financial companies must submit the following documents to Bangladesh Bank when applying for refinance facilities:
    a) Customer's application for availing loan/investment under the refinance facility; b) Sanction letter related to loan/investment disbursement; c) Customer's updated CIB report; d) Term loan/investment agreement and repayment schedule; e) Updated statement of disbursed loan/investment account; f) Statement of relevant expenses and other documents; g) Customer and relevant project profile; and h) Technical report including estimated valuation/project cost of the technology/project/initiative/activity by an expert institution registered/approved by the relevant ministry/directorate/institution of the government or an expert related to the information and communication technology sector from a recognized university in Bangladesh;
    18.2. To avail refinance facilities, PFIs must submit Demand Promissory Note, Letter of Continuity, Letter of Debit Authority, and other necessary charge documents.
19. Other Conditions: Regarding borrower selection, loan/investment sanction, acceptance of necessary collateral, execution of loan/investment related documents, loan/investment-equity ratio, proper utilization of loans/investments, and post-disbursement monitoring, banks and financial companies will follow their own risk management policies, as well as Bangladesh Bank's instructions in this regard, and other existing laws and regulations.
20. Islamic Shariah-based banks and financial companies can conduct investment activities under this fund in accordance with their own approved Shariah principles without violating the above conditions.
21. The Sustainable Finance Department, Bangladesh Bank, reserves the right to add, subtract, or amend any conditions of the refinance fund.
22. This circular is issued under the powers conferred by Section 45 of the Bank-Company (Amendment) Act 2023 and Section 41 of the Financial Company Act, 2023, and shall be effective immediately.
    Yours faithfully,
    Attachment: As described
    (Chowdhury Liaquat Ali)
    Director (SFD)
    Phone: 9530320
    E-mail: chowdhury.ali@bb.org.bd

Annex-A
Quarterly Report on Loan/Investment Disbursed under "Refinance Scheme for the Development of ICT Sector"

Sl. No.	Name of the Borrowers	Date of Disbursement	Tenor of the Loan/Inv.	Approval of Refinance from BB	Overdue Installment Recovery During the Quarter	Cumulative Recovery (As on ...)	Outstanding Amount (As on ...)	Classification Status
				Date	Amount	Number	Amount
1
2
3
4
5