The central bank of the country, the Bangladesh Bank, has relaxed its rules for banks and non-bank financial institutions (NBFIs) to issue loans to cottage, micro, small, and medium-sized enterprises from the government-announced Tk20,000 crore stimulus package.
The central bank issued a circular in this regard on Monday, stating the Bangladesh Bank incorporated the changes to expedite loan disbursement from the package.
Even though the central bank formed a Tk10,000 crore refinance scheme to support the banks and NBFIs with liquidity, the disbursement of loans from the package remained low.
So, this prompted the central bank to extend the loan disbursement deadline by two months to October.
As per the new circular, banks and NBFIs were allowed to disburse 80 percent of their overall loans to the manufacturing and service sub-sectors.
Earlier, the banks and NBFIs were allowed to disburse 50 percent and 30 percent of their total loans to the manufacturing and service sub-sectors, respectively.
Monday's circular from the Bangladesh Bank also mentioned that none of the manufacturing or service sector entities would be entitled to get loans exceeding 50 percent of their outstanding working capital loans as on December 31, 2019.
The same loan ratio would be applicable for the new borrowers as well, it said, adding that the borrowers would get 50 percent of their entitled working capital loans as stimulus loans.