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BB eases rules for pre-shipment credit refinance

Timeline extended to five years


| Updated: May 19, 2022 14:05:25


BB eases rules for pre-shipment credit refinance

The Bangladesh Bank (BB) has further relaxed the rules for availing pre-shipment credit refinance - for helping local exporters continue shipping their products amid the ongoing coronavirus outbreak.

Now the timeline has been extended to five years since 13 April 2020, according to a new circular - issued by BB on Wednesday.

The fund will be revolving now and the period is five years, up by two years from the previous three years.

Any exporter and organisation, which produces export-oriented goods locally, will be able to avail of this facility.

The BB in 2020 introduced the loan facility, titled pre-shipment credit refinance scheme - involving Tk 50 billion from its own coffer, to facilitate the local exporters - facing troubles in the wake of the coronavirus pandemic. The banks disbursed Tk 6.52 billion from the scheme till April 13 this year.

If there are three overdue export bills, the exporters will not get the benefit, as per the BB circular. It also reads that the orders related with "shell corporations" will not get the benefit.

The participatory banks will borrow money from the fund at 0.5 per cent rate, while the clients will pay the highest 3.5 per cent interest.

Depending on the bank-customer relationship, the participatory banks will provide credit excluding the amount of back-to-back letter of credit (LC).

Under the pre-shipment credit, the clients can use the loan to produce goods before shipping those abroad. The exporters are also allowed to import raw materials, provide salary to workers, pack items, and so on.

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