The central bank has asked banks to fix the interest rate of pre-shipment loans in line with the new reference lending rate as part of its efforts to make it market-based.
The move is aimed at making export-oriented companies more resilient against shocks stemming from the ongoing global economic crisis, helping them thrive and ensuring a more efficient credit management in the banking sector, said the Bangladesh Bank in a circular yesterday.
Banks have been asked to add a maximum of 2 percent in margin with the reference lending rate, known as the SMART (six-month moving average rate of Treasury bill), when they fix the interest rate of pre-shipment export credits.
The pre-shipment credit is a loan granted to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment.
In June, the BB introduced the market-driven lending rate for banks and non-banking financial institutions, replacing the 9 percent lending rate cap that had been in place since April 2020.
If all installments of a loan or partial installments are categorised as overdue, a maximum of 1.5 percent penalty interest can be slapped on the entire outstanding of a working capital loan or the installments of a demand loan that are behind schedule.