BB allows banks to charge addt’l 1% interest on EDF loans for interim period

Bangladesh Bank has allowed the authorised dealer (AD) banks to charge additional 1% interest on exporters for interim period against loans under Export Development Fund (EDF).

"To maintain smooth support for input procurements from EDF against export trade, it has been decided that ADs may charge additional interest to borrowers not exceeding 1% per annum for the period between 'import payments from sources of ADs' and 'receipts of refinancing from EDF'. As usual, ADs will be charged by Bangladesh Bank at 1% per annum against its refinancing from EDF," as per a BB circular issued today.

The BB notice said that the ongoing export trend creates huge demand for input procurements, leading to pressures on EDF loans.