Bangladesh Bank (BB) has launched a Tk20,000 crore revolving pre-finance scheme to help revive closed and underutilised large industrial and service sector enterprises, with the aim of restoring production, generating employment and strengthening the country's industrial base.
The central bank introduced the 'Closed Industry and Service Sector Facilitation Pre-finance Scheme' to provide working capital support to eligible enterprises in line with the National Industrial Policy.
Under the scheme, a single borrower or business group will be eligible to receive up to Tk200 crore as a one-year revolving loan or investment facility, renewable subject to satisfactory performance and the availability of funds.
Bangladesh Bank will provide funds to participating financial institutions (PFIs) at an interest rate of 4 percent, while the maximum lending rate for borrowers has been capped at 7 percent.
The facility is intended to support industries facing production disruptions or operating below capacity by financing operational expenses, including the procurement of raw materials, payment of utility bills, execution of export orders, and payment of salaries and wages for up to four months.
Salary payments must be made through bank accounts or Mobile Financial Services (MFS), while cash disbursements will not be permitted.
Export-oriented industries and deemed exporters will receive priority under the scheme.
To ensure the sustainable revival of businesses, participating financial institutions have been instructed to conduct detailed assessments of applicants. This includes identifying the reasons behind previous operational failures and verifying that corrective measures have been implemented before financing is approved.
The scheme incorporates a range of governance and compliance requirements.
Borrowers must obtain certification from their respective trade associations, including the FBCCI, BGMEA or BKMEA, while loan defaulters will not be eligible for financing.
In addition, borrowers must obtain the facility through the same bank or financial institution that financed their original project, and all transactions must be routed through designated escrow or revenue accounts.
The guidelines also require participating financial institutions to ensure borrowers are not involved in money laundering, fraud, forgery or the diversion of funds.
Banks may appoint representatives or specialists to the boards of recipient companies to help ensure the proper utilisation of the funds.
Bangladesh Bank said the financing cannot be used to adjust or repay existing loans or investments, ensuring that the facility remains focused on restoring productive economic activity.
The scheme will be implemented under BRPD-1 Circular No. 13 and BRPD-3 Circular Letter No. 01. Participating financial institutions will be required to sign participation agreements with the Banking Regulation and Policy Department (BRPD)-3 and submit quarterly implementation reports.
The central bank expects the initiative to accelerate the reopening of viable industries, enhance production capacity, support exports, preserve employment and contribute to stronger economic growth by bringing idle industrial assets back into operation.