Bangladesh Bank unveils long-term financing facility for export units

The decision follows the success of a long-term financing facility (LTFF) programme launched earlier by the central bank that offered access to long-term funds in foreign currencies to capital-intensive manufacturing firms, media outlets in the country reported.

The financing will be offered through banks, known as participating financial institutions (PFIs), authorised to deal with foreign exchange.

PFIs must have a minimum rating of three or better CAMELS ratings determined by the bank, must have less than 8 per cent non-performing loans and meet the minimum regulatory capital adequacy requirement to be eligible to participate in the fund.

Problematic banks or those with large financial scams or those with an observer or coordinator placed by the central bank are ineligible, the bank’s guideline said.

Refinancing from the fund against the loans that had been disbursed before January 1, 2021 will not be permissible.

The fund can be used to purchase capital machinery, meet installation-related expenses and expand or set up new manufacturing industries.

Purchasing of ocean-going vessels and specialised transport vehicles supporting the transportation of indigenously-manufactured goods and setting up businesses that comply with environmental and social standards will be facilitated.

Financing will not be provided to any loans that result in direct economic, social or environmental impacts through land acquisition, involuntary resettlement, impact on indigenous people, and loss of income sources or means of livelihood.

Fibre2Fashion News Desk (DS)