Cinema owners to get loans at 5% interest under refinancing scheme

The cinema owners will now get loan at 5% interest from the refinancing fund of Tk1,000 crore the Bangladesh Bank has set up to take the country's film industry forward.

Under the fund, a loan of Tk500 crore will be provided in the first phase. If the loan is disbursed and recovered properly, the remaining Tk500 crore will be given in the next phase.

The Banking Regulation and Policy Department of the Bangladesh Bank issued a circular in this regard on Sunday.

According to the circular, a cinema owner in metropolitan areas can borrow a maximum of Tk5 crore at 5% interest while those outside metropolitan peripheries at 4.5% interest.

The movie theatre owners have to apply to bank to get the loan. The deadline for applications is 31 March 2022.

The total time available for loan repayment is eight years with a grace period of one year. 

If any owner uses the loan for a different purpose, an additional 2% interest will be imposed. The debt cannot be used as working capital, according to the circular.

The loan can only be used for construction of new cinema, renovation of old one and import of related equipment, machinery and technology for cinemas.

In addition, the shopping complexes that house cinemas will also get loan from this fund.

The circular said the role of pure entertainment in building a healthy nation is undeniable. 

In the nineties, there were about 1,400 cinemas in this country, but due to various obstacles, the number is gradually decreasing.

The existing move theatres need to be renovated while new ones constructed with modern standard in order to provide healthy entertainment to the cinema-loving people across the country.

In this case, if long-term loans are provided to the cinema owners at low interest rates, they will be able to turn around, said the circular.

The fund was approved at the board of directors meeting of the Bangladesh Bank on 26 January. 

Earlier, Prime Minister Sheikh Hasina announced the formation of the fund for the cinemas by virtually joining the ceremony of National Film Awards in the outgoing year of 2020.

At a meeting of the Executive Committee of the National Economic Council in last August, the premier issued a directive to form a special fund.

In addition to the loan facility, the cinema owners have been demanding reduction in tariffs on the imports of good film-making and movie-related machinery.