Tk 100cr refinancing fund approved for bus owners

The Bangladesh Bank has in principle approved setting up of a refinancing fund of Tk100 crore to provide long-term loans at low interest to the bus owners affected by the ongoing Covid-19 pandemic.

Under the refinancing credit scheme, affected bus owners will get loans at 6% interest.

Sources at the central bank said details of the policy such as which type of bus owners will be eligible for the loan and when they can apply will be made public later.

According to the sources, there were 12 agendas in the board's 414th meeting and that of the refinancing fund for bus owners to assist the transport sector in coping with the impact of the pandemic was among the top ones.

Asked about the refinance scheme, Khandaker Enayetullah, general secretary of the Dhaka Road Transport Owners Association, told The Business Standard that new investors in the transport sector would benefit from loans from the scheme.

It will not be possible to compensate those who have been affected by the pandemic, said, claiming that transport owners have suffered a loss of Tk58,000 crore due to the pandemic so far.

"What will we do with the loan money if the transport stays stopped due to Covid?" Enayetullah said.

The transport trader said, "We would be benefited if interest rates on earlier loans were reduced rather than giving low-interest loans. A proposal was sent to the government in this regard. Besides, a separate incentive package of Tk5,000 crore has also been demanded for the transport sector."

Ramendra Nath Ghosh alias Noah Ghosh, a partner of Shyamoli Paribahan, told The Business Standard, "Many owners could not repay the previous loan instalments as business was affected. How will these transport owners get loans from this fund? Can they get a loan from a new bank?"

He said it would be better if a condition that those who failed to pay instalments of their previous loans is not attached. Otherwise, there are doubts whether this fund will be helpful.

In February this year, the Bangladesh Bank had set up a refinancing fund of Tk1,000 crore for the development of the film industry.

From this fund, a cinema hall owner will be able to borrow a maximum of Tk5 crore for the construction or renovation of a new hall at an interest rate of 5% in metropolitan areas and 4% outside metropolitan areas. The maximum repayment period is 8 years.