Bangladesh Bank has increased the limit of borrowing by an exporter from the Export Development Fund to $15 million from the existing $12 million.
The manufacturing-oriented exporters of the BTMA, BGMEA and BKMEA are eligible to avail the opportunity of the central bank’s special fund.
The BB on Tuesday issued a circular to authorised dealer branches of all scheduled banks in this regard saying that from now on the ADs would be able to finance maximum $15 million to an exporter.
The manufacturing-oriented exporters will get the facility to import raw materials for producing their export items.
A BB official told New Age on Tuesday that the central bank widened the credit limit due to the increasing demand from the exporters.
On April 7, 2014, the central bank increased the size of the EDF by 20 per cent to make it $1.2 billion to meet exporters’ demands.
The EDF began with an initial amount of $100 million in 2005, which gradually increased to $1 billion last year.
The loans are payable by the banks upon receipt of export proceeds within 180 days of the date of disbursement.
Under the EDF, commercial banks will charge exporters the LIBOR (London Interbank Offered Rate) plus 1.5 per cent, meaning, the cost of loans will remain within 2 per cent as the six-month LIBOR rate is 0.35 per cent at present.
LIBOR is the rate banks charge each other for short-term loans in the London interbank market. It also serves as a global benchmark for short-term interest rates.
The BB is following the LIBOR because the loans will be given in foreign currencies.