Regulatory Alerts2022-07-21
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SMESPD Circular Letter No. 03: Amendments to Financing Facility Under LFSSP Project
Bangladesh Bank amends specific clauses of SMESPD Circular No. 03 dated 27 March 2022 regarding the Line of Finance to Support SMEs Project. The changes reduce the minimum operational experience for Participating Financial Institutions from three to two years, lower the required CAMELS rating from 'Satisfactory' to 'Fair', and substitute references to Non-Performing Loans with Non-Performing Investments. Additionally, the deadline for submitting applications is extended by three months from the expiration of the original deadline, and various administrative terms in agency agreements and eligibility criteria are updated.
website: www.bb.org.bd BANGLADESH BANK (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh SMESPD (LFSSP) Circular Letter No- 03 3 Date: 21/07/2022
Managing Directors/Chief Executive Officers All Banks and Financial Institutions in Bangladesh Head Office Dhaka. Financing facility under “Line of Finance to Support SMEs Project under the IsDB SPRP for Covid-19, Restore Track (LFSSP), BGD-1074.”
Please refer to the SMESPD (LFSSP) Circular No- 03, Dated 27 March, 2022 regarding the Financing facility under the captioned project. A. The following clauses of the aforesaid circular have been amended as under:
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Agency Fee (Sl. No.- 8): The words ‘’for each drawdown’’ in the sentence ‘BB will provide an amount not exceeding BDT 500.00 (including VAT & Tax) to each PFIs (as an agent) for each drawdown as agency fee’ will be deleted;
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ELIGIBILITY CRITERIA OF PARTICIPATING FINANCIAL INSTITUTIONS (Annex-A): i) The minimum successful operational experience of PFIs of 03 (three) years will be substituted by 02 (two) years; ii) The minimum standard of CAMELS rating of PFIs of ‘Satisfactory’ will be substituted by ‘Fair’;
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Financial Statements : Attachment to Accreditation Assessment Form(Annex-C): ‘NPL’ will be substituted by “NPI”.
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FORM OF AGENCY AGREEMENT (SCHEDULE IV, Para no. 1.1.2): The words ‘‘ten (10) US Dollars’’ will be substituted by ‘’Taka Five hundred (500/-) only including VAT and Tax’’; Continued/2 SME & Special Programmes Department LFSSP PMU
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SAMPLE DISBURSEMENT PLAN FORM (Annex-G): In the 3rd column title ‘Name & Address of contractor/supplier’ will be substituted by “Name & Address of CMSMEs/contractor/supplier” and in the footnote ‘*Whether women/youth-led enterprise or not’ will be substituted by ‘’*Whether women/youth-led enterprise and Kind of Investment Scheme (Short/Mid/Long Term)’’;
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TERMS AND CONDITIONS OF ON- FINANCING FACILITY (OFF) TO PFIs (AnnexE) and TERMS AND CONDITIONS OF SUB-INVESTMENT TO ELIGIBLE PROJECT COMPANY/ENTERPRISE (Annex-K): i) In both annexes, ‘Murabaha Financing (Instalment Sale)’ will be substituted by “Murabaha Financing” as the mode of financing; ii) Further under the sub-heading III (Other Eligibility Criteria of Project Companies/Enterprises) of Annex-K, in ‘sl. b’: ‘’………. and the company/enterprise must not be a defaulter of any kind of institutional investment before the crisis’’ will be substituted by “..................... and the company/enterprise must be a regular borrower of any kind of institutional investment before the crisis of pandemic (Covid-19)”. B. The deadline of the submission of the application will be extended further 03 months from the expiration of the deadline declared on SMESPD Circular no. 03, dated 27/03/2022 or a later date approved by BB authority. Other relevant instructions in this regard shall remain unchanged. Yours Sincerely, (AKM Sayduzzaman) Additional Director & Project Director (LFSSP) Phone: 9530098