SFD Circular No. 02: Export Diversification Refinance Scheme

Website: www.bb.gov.bd Sustainable Finance Department Bangladesh Bank Head Office Dhaka 07 June 2026 SFD Circular No. 02 Dated ------------ 24th Ziyashth 1433 Managing Director / Chief Executive Officer All Scheduled Banks Operating in Bangladesh Dear Sir, Context of Forming the Export Diversification Refinance Scheme

Currently, Bangladesh's export sector is overly dependent on the garment industry. In this sector, the share of value addition and employment is high. In the context of world trade, it is necessary to diversify exports to strengthen the country's export sector, obtain facilities in coordination with key partner countries, increase production capacity, create employment, achieve a balanced import-export trade, alleviate poverty, improve the export-supportive environment, create more momentum in export trade, improve the business environment, strengthen Bangladesh's position in the competitive world trade, and broaden the country's economic activities. On the other hand, it is possible to collect 100% of raw materials for some products (e.g., jute, leather) from domestic sources. If export diversification is possible in this regard, a large amount of foreign currency will be earned. In the current reality, despite the high potential of these products, many exportable sectors are not developing due to lack of adequate financing. Therefore, considering the discussed context, a Refinance Scheme named "Export Diversification Refinance Scheme" has been formed with an amount of 3,000 (Three Thousand) Crore Taka. The detailed policy regarding the said Refinance Scheme is as follows:

1. Title: Export Diversification Refinance Scheme (ঊীঢ়ড়ৎঃ উরাবৎংরভরপধঃরড়হ জবভরহধহপব ঝপযবসব)
2. Objective of Scheme Formation: Export Diversification.
3. Size of Scheme: 3,000 (Three Thousand) Crore Taka (Approximate).
4. Source of Scheme: Through collection of surplus liquidity by Scheduled Banks.
5. Sectors for Refinance: Industries of the highest priority sectors and special development sectors mentioned in Chapter 6 of the Export Policy 2024-27. Exporters/producer-exporters using domestic raw materials will be given priority.
6. Participating Financial Institutions (Participating Lending Institutions - PLI): Banks interested in obtaining refinancing facilities under this fund must enter into a Participation Agreement (চধৎঃরপরঢ়ধঃরড়হ অমৎববসবহঃ-চঅ) with the Bangladesh Bank (Director, Sustainable Finance Department, Bangladesh Bank, Head Office, Dhaka). The banks bound by this Participation Agreement will be considered as Participating Lending Institutions (PLI).
7. Interest/Profit Rate Structure: 8.1) Interest/Profit rate payable by PLI to Bangladesh Bank: 4%. 8.2) Maximum interest/profit rate payable by PLI to customers: 7%.
8. Interest/Profit Calculation Method: 9.1) Interest/Profit Calculation: Reducing Balance Method (জবফঁপরহম ইধষধহপব গবঃযড়ফ). 9.2) Loan/Investment-Capital Ratio: Before applying for refinancing under this scheme, the PLI must ensure the customer's Debt-Service Coverage Ratio (বয়ঁরঃু পড়হঃৎরনঁঃরড়হ). In this regard, PLIs will determine the Loan/Investment-Capital Ratio based on their Investment/Lending Policies (ওহাবংঃসবহঃ/ঈৎবফরঃ ঘড়ৎসং) and the relationship between the PLI and the customer. However, the Loan/Investment-Capital Ratio must be minimum 70:30.
9. Tenure of Refinance Scheme: 03 (Three) Years.
10. Type of Refinance Scheme: Local Currency Term Loan/Investment (ঞবৎস ষড়ধহ/রহাবংঃসবহঃ).
11. Grace Period: To be determined based on the relationship between the PLI and the customer, but maximum 06 Months.
12. Customer Eligibility for the Said Refinance Scheme: 13.1) Refinancing facilities will be provided against term loans/investments (ঞবৎস ষড়ধহ/রহাবংঃসবহঃ) provided by the customer in local currency for export diversification under this scheme;

Website: www.bb.gov.bd 13.2) Applications for refinancing facilities against loans/investments provided to non-performing customers will not be considered. Before applying for refinancing facilities, the PLI must collect the updated CIB report of the concerned customer and their associated institutions and ensure that the borrower is not a non-performing loan. 13.3) If the interest/profit on the concerned loan/investment is waived due to the PLI's decision or if there is a history of writing off the customer's loan/investment, it will be considered ineligible for refinancing, and 13.4) If the funds are not utilized for the intended purpose, refinancing under this fund will not be considered. 14. Regarding the maximum limit of loan/investment facilities for a single customer or group, the relevant policies of the Bangladesh Bank's BRPD must be followed. 15. Compliance with all risk management policies issued by Bangladesh Bank from time to time must be ensured. 16. Schedule of Charges: The Schedule of Charges for loans/investments (excluding the interest/profit rate mentioned in Clause 8) will be determined in accordance with the relevant instructions issued from time to time by the Banking Regulation and Policy Department of Bangladesh Bank. No type of hidden charges (ঐরফফবহ ঊীঢ়বহংবং) or any other type of charges/fees/interest/profit will be imposed. However, duties/taxes imposed/levied by the government will be recoverable where applicable. 17. Refinance Application Process: 17.1) The application signed by the Managing Director/Chief Executive Officer of the PLI, along with the documents mentioned in Clause 19.2, must be submitted to the Director, Sustainable Finance Department, Bangladesh Bank, Head Office, Dhaka. 17.2) The PLI must apply to Bangladesh Bank within 90 (Ninety) days after distributing the approved loans under the refinancing facility. 17.3) The decision of Bangladesh Bank regarding the determination of the refinancing facility limit, after examining the submitted application and related documents, field inspection reports, etc., will be considered final. 18. Refinance Payment Process: 18.1) The PLI will pay the refinancing facility in fixed installments according to the repayment schedule. 18.2) The repayment schedule for the refinancing facility provided to the PLI will be prepared by Bangladesh Bank. The repayment schedule against the bank's financing to the customer must be prepared by the concerned PLI and submitted to Bangladesh Bank. 18.3) The installment payable on the date determined according to the repayment schedule will be deducted from the current account of the concerned PLI maintained with Bangladesh Bank, including interest/profit. 18.4) If a customer settles the loan/investment before the determined time, the refinancing facility will also be applicable for the maximum period for which the customer took the said loan/investment facility. In this regard, the participating bank can settle the principal amount of the refinancing facility before the tenure expires. However, as soon as the PLIs settle the loan/investment, they must inform Bangladesh Bank about the settlement of the loan/investment along with the PLI's Investment/Lending Policy. No type of charges/fees will be charged from the customer for loan settlement before maturity. 18.5) The PLIs must maintain sufficient funds/balance in their current accounts maintained with Bangladesh Bank on the date determined according to the repayment schedule. If the PLIs are unable to pay the installment/remaining amount due to insufficient funds/balance in their current accounts at the time of refinancing installment payment, the payable amount will be paid with additional interest/profit at a rate 5% higher than the interest/profit rate imposed during the refinancing period, along with the funds/balance. 19. Documentary Checklist: 19.1) To obtain refinancing facilities, the PLI must submit the following documents:

Website: www.bb.gov.bd 19.2) When applying for refinancing to Bangladesh Bank, the concerned bank/financial institution must submit the following documents: a) Updated CIB report of the customer; b) Letter from the customer regarding taking loan/investment under the refinancing facility; c) Application letter from the customer regarding loan/investment; d) Copy of the approval letter; e) Contract for term loan/investment; f) Repayment schedule for term loan/investment; g) Updated details of the loan/investment account; h) Details and other documents related to the concerned expenditure; i) Profile of the customer and the concerned project; 20. Sectors for Refinance: 'Industries of the highest priority sectors and special development sectors mentioned in Chapter 6 of the Export Policy 2024-27' for the purpose of developing the export-related industrial sector under the refinancing facility. Exporters/producer-exporters using domestic raw materials will be given priority. 21. In the case of investments by Islamic Shariah-based banks and other banks' approved investments through Islamic banking methods, banks will provide investment facilities to customers under this scheme based on their approved investment methods without changing the percentage. 22. Reporting and Monitoring: 22.1) PLIs must submit the updated details of the funds taken for refinancing along with the attached form (quarterly basis and signed by the Managing Director/Chief Executive or their designated officer) within 15 (Fifteen) days after the end of each quarter to 'Director, Sustainable Finance Department, Bangladesh Bank, Head Office, Dhaka'. PLIs that have not taken refinancing facilities must submit zero reports. 22.2) Required details/information regarding refinancing from Bangladesh Bank must be submitted within the determined time. Otherwise, measures will be taken according to existing laws and regulations. Furthermore, it must be ensured that information related to refinancing is preserved at the Head Office and branch levels. 22.3) Before approving refinancing facilities, the concerned projects and documents will be verified by Bangladesh Bank on the spot. Bangladesh Bank will conduct periodic inspection programs during the tenure of the refinancing. If any discrepancy is proven in the implementation of the project activities of the concerned PLI and the refinancing facility beneficiary institution after the approval of the refinancing facility, Bangladesh Bank will cancel the refinancing facility. 22.4) If a PLI takes refinancing facilities by providing false information or if it is discovered by Bangladesh Bank's spot inspection that the funds for loans/investments were not used properly, or if the customer benefiting from the scheme is classified as non-performing and fails to inform Bangladesh Bank, the funds provided for refinancing will be recovered in a lump sum from the current account along with interest/profit at the levied rate plus an additional 5% interest/profit, according to the terms of the participation agreement. 22.5) If a customer taking refinancing facilities is classified as non-performing at any moment during the approved time, the concerned PLI must inform Bangladesh Bank within the shortest possible time. In this case, Bangladesh Bank will recover the remaining balance in a lump sum from their current account without any reason. 23. Other Percentages: In matters such as selection of loan/investment borrowers, approval and distribution of loan/investment facilities, execution of documents related to loans/investments, Debt-Service Coverage Ratio, proper use of loan/investment funds, and post-distribution monitoring, banks and financial institutions will follow the regulations based on their risk management policies along with the instructions of Bangladesh Bank and other relevant existing laws and regulations, providing loan/investment facilities to customers. All responsibilities for recovering distributed loans/investments will rest with the distributing banks and financial institutions. There will be no connection between the recovery of loans/investments from customers and the installment payment of the concerned refinanced funds to Bangladesh Bank. 24. The Sustainable Finance Department, Bangladesh Bank reserves the right to add, subtract, and amend the percentages regarding the Refinance Fund. 25. This Circular is issued under the powers conferred by Section 45 of the Bank Company Act, 1991 (Amended in 2023), and will come into force immediately.

Yours faithfully, (Ch. Dauri Likhat Ali) Director Phone No.: 9530320 Email: poyofizintu.dhar@bb.gov.bd Page 3/3