The Bangladesh Bank (BB) has further relaxed the rules for availing of pre-shipment credit refinance to help local exporters to continue shipment amid inflation and the covid-19 pandemic.
According to a circular issued by the Bangladesh Bank on 18 May, 22 the new timeline has been extended to five years from April 13, 2020. This fund will be now revolving and the period is five years up from the previous three years.
This fund will be available to any local product exporter. The central bank 2020 introduced the loan facility, titled pre-shipment credit refinance scheme - involving Tk5,000 crore from its coffer, to facilitate the local exporters - facing troubles in the wake of the pandemic.
The banks disbursed Tk652 crore from the scheme till April 13 this year.
However, if the exporter has any overdue export bills, he/she will not be able to avail of this facility. The circular also mentions orders related to shell corporations will not get the benefit.
The participatory banks will borrow money from the fund at a 0.5% rate, while the clients will pay the highest 3.5% interest.
The participatory bank will provide the credit excluding the amount of back-to-back letter of credit (LC). Under the pre-shipment credit, the clients can use the loan to produce goods before shipping those abroad.
The exporters are also allowed to import raw materials, provide salaries to workers, pack items, and so on.
Photo Courtesy: Canva
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