Bangladesh Bank signs agreements with six banks for long-term financing

Bangladesh Bank signs agreements with six banks for long-term financing

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Bangladesh Bank (BB) signed separate agreements with six private banks on Wednesday, the 23rd of December, 2015 to facilitate long-term financing under the World Bank funded Financial Sector Support Project (FSSP) at the Bangladesh Bank Head Office premise.Under the agreements, the six banks – Dutch Bangla Bank Limited, IFIC Bank Limited, South East Bank Limited, Standard Bank Limited, Trust Bank Limited, and Standard Chartered Bank – can go for long-term financing of projects in manufacturing sectors of the economy receiving support from this fund.
It is worth mentioning that, likewise Participating Agreements for the financing facility between Bangladesh Bank and ten banks – Mutual Trust Bank Limited, Prime Bank Limited, One Bank Limited, Al-Arafah Islami Bank Limited, Eastern Bank Limited, United Commercial Bank Limited, Dhaka Bank Limited, Bank Asia Limited, Social Islami Bank Limited and Export Import Bank of Bangladesh Limited was previously signed in two phases. Bangladesh Bank will continue this process in phases with all banks in Bangladesh that would meet the eligibility criteria for participating in the facility set by it.
Addressing the Agreement Signing Ceremony at the Central Bank, BB Deputy Governor, Ms. Nazneen Sultana said that Bangladesh Bank under the auspices of International Development Association (IDA) of the World Bank will provide US$300 million through FSSP which will play pivotal role in meeting the growing demand for long-term financing for productive sectors in the country.
The BB Deputy Governor also opined that the prevailing dearth in investment in the country will diminish and many entrepreneurs will come forward to take the opportunity for this fund. She expressed the hope that this fund would enable the manufacturing sector to remain competitive and enhance their likelihood for grabbing the emerging business opportunities in the country and thus contribute to the job creation and economic growth of the economy in turn.
Under FSSP fund for long-term financing, the banks can lend money for ventures in the industrial productive sectors for tenure of 3 to 10 years. The banks will have to pay interest rate between 3.25 per cent and 4.25 per cent to the Central Bank to use the refinance fund. The interest rate will be set considering the respective banks’ CAMELS rating. The banks will impose maximum three per cent interest rate spread to disburse the loan to the entrepreneurs meaning that the importers will be able to receive the loan from the banks by giving interest rate no more than 6.25 per cent.
Among others, Executive Director (FSSP) of BB, Md. Ahsan Ullah and the Managing Directors/ Chief Executive Officers of the six participating banks spoke on the occasion. – BB Press release

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