Businesses seeking support under Bangladesh Bank's Tk 20,000 crore "Closed Industry and Service Sector Facilitation Pre-finance Scheme" will be eligible to receive a maximum of Tk 200 crore in outstanding loans or investments, as the central bank unveiled detailed operational guidelines on Tuesday to accelerate the revival of distressed industries and service-sector enterprises.
The one-year financing facility, renewable subject to borrowers' performance and the availability of funds, is designed to inject much-needed working capital into large industrial and service-sector businesses that have either shut down, suspended operations or are running well below capacity because of acute liquidity shortages. Export-oriented enterprises will receive priority under the scheme.
The guidelines, issued by Bangladesh Bank, outline the procedures for accessing the Tk 20,000 crore fund, which will be financed from the surplus liquidity of scheduled banks as part of the government's broader effort to restore industrial production, safeguard employment and stimulate economic activity in line with the National Industry Policy.
Under the framework, banks must first sign a participation agreement with Bangladesh Bank before extending any financing. Once a loan or investment proposal receives board approval, participating banks must obtain pre-finance approval from the central bank prior to disbursing funds.
To strengthen governance and minimise credit risks, banks are required to submit comprehensive due diligence documents certifying that prospective borrowers have not been involved in money laundering, fraud, loan diversion or misuse of previous financing facilities. They must also assess borrowers' production or service capacity and closely monitor the utilisation of funds through regular factory inspections and quarterly sales or revenue reports.
The scheme requires participating banks to execute a range of legal documents, including participation agreements, letters of authorisation, debit authority, continuity undertakings and promissory notes.
According to the participation agreement attached to the circular, no borrower or business group will be allowed to hold more than Tk 200 crore in outstanding financing under the scheme at any one time.
Banks may charge borrowers a maximum annual interest or profit rate of 7 per cent, while Bangladesh Bank will provide the pre-finance facility to participating banks at a rate of 4 per cent.
The funds can be used exclusively for working capital requirements, including payment of salaries and wages, procurement of raw materials, utility bills, production expenses and execution of export orders. The scheme expressly prohibits the use of the facility for repaying existing loans or investments.
Participating banks must submit quarterly reports on loan disbursement and recovery to Bangladesh Bank by the 10th day of the month following each quarter.
The central bank warned that any breach of the scheme's conditions could lead to cancellation of the pre-finance facility, recovery of the funds and the imposition of penal interest.
