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.

Mohammed Nurul Amin has recently joined Meghna Bank as managing director and chief executive officer for a three-year term, the bank said in a statement yesterday.
Prior to joining Meghna Bank, Amin served NCC Bank for nine years as managing director and CEO. He started his career as with Janata Bank in 1977 and also worked with National Bank.
He is a former chairman of the Association of Bankers, Bangladesh and Primary Dealers Bangladesh Ltd and a former vice chairman of Bangladesh Foreign Exchange Dealers' Association.

The Bangladesh Bank has seemingly failed to check capital flight from the country although it has a full-fledged unit to monitor and detect such illegal transactions widely known as ‘hundi’.
The BB governor, Atiur Rahman, in a statement to the parliamentary standing committee on ministry of finance recently expressed his helplessness about the matter saying that in most of the cases the smuggled-out money remained untraced.
He admitted that the central bank had failed to check the thriving hundi business, an illegal transaction system that operates bypassing the banking channel.
Atiur’s statement stunned many, including the BB insiders, who said that a wing under the central bank had been working for long to detect such illegal transactions and check those.
The financial intelligence unit under the BB is said to have been strengthened following an amendment to the money laundering law. The BB has struck memorandums of understanding with central banks of other countries to exchange information on shady transactions.
In the same statement seen by New Age, Atiur, however, hoped that the situation would improve after the completion of automation in the National Board of Revenue.
‘Transparency and accountability would be established after the automation,’ said the BB governor.
The Paris-based Financial Action Task Force (FATF), de-listed Bangladesh from its ‘Grey List’ in February for the country’s efforts in combating money laundering.
The organisation had kept the country in the negative list since 2008.
‘We are examining the statement of the BB on money laundering and illegal transactions,’ standing committee chairman M Abdur Razzak told New Age last week.
He said it was important to check hundi business to halt capital flight for the sake of the economy. He said they needed to crosscheck the documents on the country’s imports and exports.
Under-invoicing and over-invoicing are widely used by dishonest businessmen as a means to smuggle out money, said BB officials.
NBR was primarily responsible to detect such practices, but BB cannot overlook the matter as import payments and export receipts are done through the banking channel, they said.
They alleged that many dishonest businessmen gave false statements on their import consignments to send money abroad. Besides, many exporters buy time to bring the receipts for the same purpose, they said.
Finance minister AMA Muhith in a number of pre-budget discussions was urged by experts and the treasury bench members to bolster efforts to check capital flight.
Muhith observed that there had been capital flight from the country to Dubai of the United Arab Emirates and Malaysia in the absence of private sector investments in the country.

The government's borrowing from the banking system stood at only 21 percent of its target in the first 11 months of the outgoing fiscal year due to slow implementation of development programmes.
Between July 1 last year and June 9 this year, around Tk 6,359 crore was borrowed from banks against the revised target of Tk 29,982 crore. The amount borrowed during the period fell 57 percent year-on-year.
Initially the government had a borrowing target of Tk 25,993 crore, which was raised by 15 percent in the revised budget.
During the period, ministries spent only Tk 39,982 crore under the government's annual development programme, the amount being 67 percent of the revised allocation, according to Implementation Monitoring and Evaluation Division.
The implementation was 69 percent in the same period a year ago.
The pace of the development works usually goes up after September, but most payments are made in June, which pushes up expenditure, along with bank borrowing, in the last month of a fiscal year, an official of the planning ministry said.
The ADP's revised allocation was Tk 60,000 crore in the outgoing fiscal year.
Though only Tk 3,934 crore was spent each month on an average during July-May, Tk 20,000 crore has to be spent in the month of June to meet the revised target, which officials said is not doable. As a result, the government may not need to borrow the entire amount of its target.
Also, borrowing through savings instruments has reduced the government's dependence on the banking system, a finance ministry official said.
The government's net borrowing through savings instruments was Tk 8,734 crore in the first 10 months of the outgoing fiscal year, according to central bank statistics.
Borrowing through savings instruments has already exceeded the target at Tk 8,000 crore and is likely to go up further. Though it will reduce the amount of bank borrowing, the interest cost will mark a rise.
However, the central bank made a significant policy shift in bank borrowing this fiscal year, which has played an effective role in containing inflation.
The government borrowed Tk 21,201 crore from commercial banks during July 1 last year till June 9 this year.
However, it repaid Tk 14,841 crore to the central bank. As a result, the net borrowing was Tk 6,359 crore.
The commercial banks' excess liquidity is huge now and stood at Tk 138,020 crore at the end of March.
This is why the government's borrowing was more from the commercial banks. If the borrowing from the central bank is reduced, non-food inflation goes down, officials said.