The government is set to receive US$200 million as syndicated loan from overseas sources for importing petroleum products, officials said Sunday.

Three foreign commercial banks (FCBs) are mobilising the loan from the global market for the state-run Bangladesh Petroleum Corporation (BPC) at 5.25 per cent rate of interest.

The banks are Standard Chartered Bank, Hongkong and Shanghai Banking Corporation Limited, generally known as HSBC, and Citibank N.A.

"All official formalities have been completed. The SCBs are scheduled to start disbursing the loan from Tuesday (March 6)," a senior official of the Bangladesh Bank (BB) told the FE.

He also said the hard-term loan committee has already approved the loan proposal to ease pressure on the country's foreign exchange reserve.

"The loan will help keep the foreign exchange market stable to some extent," another BB official said, adding that the loan will be treated as 'revolving facility' initially for a period of one year.

The latest move of the government came against the backdrop of reluctance on the part of the state-owned commercial banks (SCBs) to open letters of credit (LCs) for importing fuel oils by the BPC.

The dues of BPC with five state-run banks stood at more than Tk 170 billion till January 2012.

The BPC's overdues to the banks have gradually been rising in the recent times. As a result, the banks are facing liquidity problem.

Financial Express/Bangladesh/ 5th March 2012