Banks asked to give stimulus loans to first-time borrowers
The Bangladesh Bank asked banks to give loans to those, who did not receive the low-cost financing yet, but got badly affected by the pandemic
Banks have been instructed to disburse stimulus loans to the businesses of industries and the service sector which are going to take this opportunity for the very first time under incentive packages.
In a circular on Thursday, the Bangladesh Bank asked banks to give loans to those, who did not receive the low-cost financing yet, but got badly affected by the pandemic.
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However, the central bank mentioned in the circular that, to get the stimulus loans in fiscal 2021-22, businesses will be considered under the outstanding working capital limit, as of 31 December 2020.
On the other hand, businesses which have already taken loans of the first phase or got partial loan opportunity within 30 June 2021, they will take more loans from first July of 2021. In this regard, they will be considered under the outstanding working capital limit, as of 31 December 2019.
The stimulus packages, announced by the government to revive the pandemic-hit economy, have reached around 1.24 crore beneficiaries as of May this year, said the recent survey report of the Bangladesh Bank.
Only 3,245 large firms have enjoyed 39% of the total disbursed stimulus loans when around one lakh small businesses have received 17% as of May, reflecting how unequally financial packages have been implemented, according to the latest report of the central bank.
On 25 June last year, the Bangladesh Bank instructed banks and non-bank financial institutions to include more large industries and service sector business entities in the stimulus package where they can receive loans for three years under the stimulus package of Tk30,000 crore if they do not avail the total eligible amount in a year.
In that circular, the Bangladesh Bank allowed banks and non-bank financial institutions to issue loans to eligible borrowers in phases in three years and instructed the lenders to include a bigger number of business entities in the stimulus package.
Before that, an entity had been entitled to the low-cost loan just for one year.
Following the outbreak of novel coronavirus, the government announced a number of stimulus packages worth Tk34,000 crore for businesses of the industries and the service sector including the recent one-year stimulus of 1,000 crore for the coronavirus-hit hotels, motels, and theme parks of the tourism sector.
In different packages, the government will pay half of the applicable interest, and borrowers will have to pay the remaining half.
The Bangladesh Bank also clarified that the interest subsidy will only be given against the loans that are within the specified limit.
