SMESPD Circular Letter No. 02: Conversion of Refinance Scheme Amounting to Taka 25,000 Crore to Pre-Finance Scheme

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh.

SMESPD Circular Letter No. 02 Date: 17 Magh 1429 31 January 2023

To, Managing Director/Chief Executive Officer All Scheduled Banks and Financial Institutions operating in Bangladesh

Subject: Conversion of the 'Refinance Scheme of Taka 25,000 (Twenty-Five Thousand) Crore against Authorization in the CM-SME Sector' into a Pre-Authorization Scheme.

Reference is drawn to your attention to SMESPD Circular No. 04 dated July 19, 2022, SMESPD Circular Letter No. 07 dated November 08, 2022, and SMESPD Circular Letter No. 01 dated January 18, 2023, regarding the subject matter.

2. Under the scheme mentioned in the subject, participating banks and financial institutions are providing refinance facilities against term and working capital loans/investments granted to their customers.

3. The Bangladesh Bank has been informed that due to foreign exchange sales reasons, a large amount of local currency is being deposited with the central bank from the banking sector. Consequently, the internal flow of funds in banks has decreased, creating hindrances in lending to the CM-SME sector.

4. Considering the aforementioned context, with the aim of increasing the flow of loans in the CM-SME sector as a priority sector of the government, the aforementioned refinance scheme formulated by the Bangladesh Bank is hereby declared as a Pre-Authorization Scheme from now on.

5. The banks and financial institutions that have previously entered into agreements as Participating Financial Institutions (PFI) for the previous refinance will be provided with the allocated funds as Pre-Authorization. Considering the progress of loan disbursement, banks and financial institutions will be provided with advance funds from the said fund on a quarterly basis from now on. The Bangladesh Bank may take decisions on any matter, including fund allocation, based on the efficiency of participating banks and financial institutions in utilizing the said pre-authorization funds.

6. However, for the loans/investments already distributed through banks and financial institutions under SMESPD Circular No. 04/2022, the refinance facility will remain operational. For this purpose, banks and financial institutions must submit applications to this department by February 28, 2023, to avail the refinance facility against loans/investments already granted.

7. To receive funds from the pre-authorization fund for operating the loan/investment program of the next quarter at the end of each quarter, details/information of loans/investments distributed in the previous quarter must be submitted to the Bangladesh Bank in accordance with the instructions mentioned in Paragraph 8.

8. To receive funds regarding the matter mentioned in Paragraph 7, application forms must be submitted by the 10th of the month immediately following each quarter, in accordance with Annexure 'G' and Annexure 'Ch'.

9. Furthermore, other instructions of the aforementioned circular and circular letters remain unchanged. The Bangladesh Bank reserves the right to make any necessary changes, amendments, additions, or deletions to the subject scheme from time to time for its smooth operation.

10. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991, and Section 18 of the Financial Institutions Act, 1993.

11. These instructions will come into force immediately.

Yours faithfully,

Enclosures: As per list.

(Mohammad Ashiqur Rahman) Director (SMESPD) Phone: 9530502

Annexure-'G' Subject: ----------------- Date: -------------

Director (SMESPD) SMESPD Bangladesh Bank Chief Executive Office Dhaka.

Sir,

Regarding the distribution of loans/investments through pre-authorization taken under the 'Refinance Scheme of Taka 25,000 (Twenty-Five Thousand) Crore against Authorization in the CM-SME Sector'.

Under the subject scheme, on ------- date, the Bangladesh Bank provided a total of Taka ----------------- (in words ----------) as pre-authorization to our bank/financial institution, which, in accordance with the instructions of SMESPD Circular No. 04 issued on July 19, 2022, loans/investments totaling -------------- Taka were distributed to a total of ----------- CM-SME entrepreneurs from date ------------ to date ------------. The detailed information is attached herewith as per Annexure-'Ch'. The sector-wise distribution of authorization distributed so far under the said scheme is mentioned in the table below:

Nature of Enterprise	Amount Distributed	Rate of Distribution	Type of Loan/Investment	Amount Distributed	Rate of Distribution	Type of Enterprise
Production	Term	Micro, Small and Tiny	Service	Working Capital	Medium Business

Yours faithfully,

(---------------------------) Managing Director/Divisional Head ---------------------- Bank/Financial Institution Phone: ---------------------- E-mail: --------------------------

Annexure-'Ch'

Regarding information on loans/investments distributed through funds received as pre-authorization under the 'Refinance Scheme of Taka 25,000 (Twenty-Five Thousand) Crore against Authorization in the CM-SME Sector'.

Yours faithfully,

(---------------------------) Managing Director/Divisional Head ---------------------- Bank/Financial Institution Phone: ---------------------- E-mail: --------------------------

Name of Bank/Financial Institution: Amount of Pre-Authorization Received: Period:

Sr. No.	Details of Loan/Investment Recipient/Enterprise	Information regarding Loan/Investment and Authorization
(1)	(2)	(3)
1
2
3
Total	-	-

Column Headers for Table:

1. Sr. No.
2. Enterprise Name
3. Enterprise Address
4. Nature of Ownership (Proprietorship/Joint Ownership/Company)
5. Type of Business/Program
6. Type of Enterprise (Micro/Micro/Small/Medium)
7. Nature of Enterprise (Production/Service/Business)
8. Trade License No.
9. Name of Entrepreneur/Entrepreneurs
10. TIN No.
11. Loan/Investment Account No.
12. Date of Loan/Investment Distribution
13. Type of Loan/Investment (Term/Working Capital)
14. Purpose of Loan/Investment
15. Amount of Loan/Investment Distributed (Taka)
16. Customer Interest/Profit Rate (%)
17. Grace Period (Months)
18. Grace Period Included
19. Tenure of Loan/Investment (Months)