Bangladesh Bank Eases Refinancing Rules for Closed Industries and Service Sectors

Bangladesh Bank has changed some rules of its Tk 20,000 crore refinancing scheme for closed industries and service businesses. The scheme was created to help these businesses restart their activities.

The new rules aim to speed up the scheme. They cover the name of the scheme, checking the eligibility of borrowers and the time for banks to apply for refinancing.

The scheme will now be called the “Closed Industries and Service Sectors Support Refinancing Scheme.” Earlier, it was called the “Closed Industries and Service Sectors Support Pre-financing Scheme.”

Bangladesh Bank’s Banking Regulation and Policy Department-1 issued a circular on Thursday (November 5) with the new instructions.

The circular was sent to the managing directors and chief executive officers of all scheduled banks operating in the country. The new rules will take effect immediately.

According to the circular, some instructions issued earlier have been changed. These included instructions issued on June 4, July 7 and September 17, 2026.

New condition for borrowers

Under the new rules, a customer who wants to take a loan under the scheme must first give a written declaration to the bank.

The customer must declare that they have not been involved in money laundering, fraud, transfer of funds or misuse of loan money.

This means banks must take a written declaration from customers before approving their loans.

Loan money must be used properly

The new rules also set conditions on how the loan money will be used.

A customer will get priority for a loan under this scheme from the same bank from which they are taking the project loan.

All transactions related to loans or investments under the scheme must be made through the customer’s escrow account or revenue account.

This rule must be followed for all financial transactions related to the project, regardless of the name of the account.

Banks must also follow the earlier rules on opening an account to record the project’s income. In this case, banks must follow Bangladesh Bank’s BRPD Circular No. 01 issued on January 18, 2024.

One week to apply for refinancing

The time for banks to apply for refinancing has also been changed.

Under the new rule, after approving and giving a loan, the bank must apply to Bangladesh Bank for refinancing within one week.

The application must include the required information and documents and must be submitted in the given format to the Director of Banking Regulation and Policy Department-3.

If a bank cannot submit the application within one week for a valid reason, it can submit the application within the next 15 days. The bank must explain the reason for the delay.

This gives banks a clear time limit as well as an extra opportunity to complete the refinancing process.

Name changed from pre-financing to refinancing

The circular also says that wherever the term “pre-financing scheme” was used in earlier instructions, it must now be replaced with “refinancing scheme.”

Other related instructions, including agreements signed with participating banks, will also be treated as changed in line with the new rules.

Bangladesh Bank said it issued the instructions under Section 45 of the Bank Company Act, 1991. The instructions will take effect immediately.

The Tk 20,000 crore scheme was created to help closed industries and service businesses restart production and services.

The new rules are expected to make the process of loan distribution and getting refinancing from Bangladesh Bank clearer for banks.