Banks to pay additional interest for delays in EDF loan repayments
Banks will have to pay an additional interest if they fail to repay loans taken from the Export Development Fund (EDF) on time.
The central bank issued a circular in this regard on Thursday (13 April).
The EDF loans from the Bangladesh Bank are repayable within 180 days of disbursement, which can be extended up to 270 days.
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In case of extension beyond 180 days, the interest rate prevailing at that time will be applicable for the extended period, reads the central bank circular.
On 1 February, the Bangladesh Bank (BB) raised the interest rate on loans made from its Export Development Fund (EDF) by 50 percentage points.
Now, banks are being charged by the Bangladesh Bank at 3%, while banks charge manufacturer-exporters a 4.50% interest.
On 9 April, the central bank reduced the ceiling of loans under the Export Development Fund (EDF) by $5 million for all types of borrowers with an aim to reduce pressure on reserves.
The limit for imports under back-to-back LCs by individual members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA) is set at $20 million, which was $25 million in the past.
Members of the Bangladesh Dyed Yarn Exporters Association can take loans up to $10 million instead of the previous ceiling of $15 million.
