Money launderers, fraudsters, and deliberate loan defaulters will be excluded from accessing a Tk 20,000 crore refinance scheme set up by the central bank to revive factories that have completely or partially ceased operations, as per Bangladesh Bank (BB) officials. The eligibility criteria for loans from the fund will be limited to legitimate businesses facing unavoidable circumstances leading to factory closures and demonstrating a commitment to loan repayment.
The initiative aims to provide low-interest working capital loans to affected factories, with the possibility of offering term loans in certain cases. Sources familiar with the matter at BB disclosed that the interest rate is likely to be pegged at 13 percent, potentially supplemented by a 5 percent subsidy. The finalization of the policy is pending approval from the finance ministry on the interest subsidy, following which the fund will be officially launched upon completion of all necessary procedures.
In a recent statement on May 1, Prime Minister Tarique Rahman highlighted government efforts to gradually reopen shuttered factories nationwide. He directed relevant authorities to assess the feasibility of resuming operations at each factory promptly to promote job creation. Consequently, commercial banks were instructed by BB to compile lists of closed factories to facilitate the identification of eligible recipients for financial assistance.
According to BB officials, commercial banks have identified and submitted a list of over 1,000 fully or partially closed factories and industries to the central bank, each with outstanding loans exceeding Tk 100 crore. Meanwhile, a committee led by BB Deputy Governor Md Kabir Ahmed has initiated the development of a comprehensive policy framework for the fund.
Ongoing consultations between the central bank and the government are focused on determining the necessary support mechanisms to reopen closed factories. The establishment of the fund and issuance of the policy will follow the conclusion of these deliberations. Bankers have proposed the provision of a government or central bank guarantee for loans extended to revive factories, along with the requirement for additional collateral from entrepreneurs in addition to existing security measures.
Furthermore, the proposal includes the authorization for banks to engage consultants to monitor the operational status of factories and the appropriate utilization of loan funds. Following the change in government leadership in August 2024, the central bank, under the interim government, introduced a more lenient loan rescheduling policy to assist affected factories and industries.
