Cenbank’s Tk60,000cr stimulus package: 17 banks sign deal to provide Tk41,000cr

The largest allocation — Tk20,000 crore — has been earmarked for reopening industrial factories that have remained closed for a long time

Seventeen banks have completed agreements to provide Tk41,000 crore for Bangladesh Bank’s Tk60,000 crore stimulus package aimed at reopening closed factories, boosting private sector investment and reviving the stagnant economy.

The 17 banks are Sonali, Agrani, Rupali, BRAC, City, Jamuna, Dutch-Bangla, Mutual Trust, Uttara, Prime, Bank Asia, National Credit and Commerce, Pubali, Eastern, Mercantile, Trust, and Southeast, officials at the central bank’s Banking Regulation and Policy Department confirmed to TBS today (27 August).

On 23 May, Bangladesh Bank announced the Tk60,000 crore stimulus package to restart closed factories, increase private sector investment, and revive economic activity.

Under the package, commercial banks will contribute Tk41,000 crore, while the central bank will provide the remaining Tk19,000 crore.

The largest allocation – Tk20,000 crore – has been earmarked for reopening industrial factories that have remained closed for a long time.

The private sector will receive loans from the fund at an average interest rate of 7.5%.

The central bank plans to create a minimum three-year refinancing fund worth Tk41,000 crore by mobilising deposits from banks sitting on excess liquidity.

These are banks whose advance-deposit ratio has crossed 70% but remains within the regulatory ceiling, leaving them with surplus funds they are unable or unwilling to lend due to rising default risks and weak borrower demand.

The central bank will accept those deposits at 10% interest. Of that amount, the government will bear 7% as subsidy from the national budget, with annual support capped at around Tk3,000 crore.

Bangladesh Bank will pay the remaining 3% from the interest income it earns through refinancing operations.

Banks borrowing from this fund will pay Bangladesh Bank 3% interest and lend onward at capped rates. Most borrowers will receive loans at a maximum 6%, while large industries will pay 7% and start-ups only 4%.

Source: The Business Standard