Dhaka, Bangladesh (BBN) – Sixteen commercial banks on Monday signed participatory deals with the central bank to disburse soft loan for reviving the country’s jute sector.
Under the re-financing scheme, the public sector jute mills will get 40 percent of the BDT 2.0 billion fund while the private sector ones will get the same portion and the traders the remaining 20 percent. The scheme will run for 5.0 years.
Managing directors and chief executive officers of the banks and their representatives signed the agreement with the central bank on behalf of their respective institutions at a ceremony held at the central bank headquarters in Dhaka. Agricultural Credit and Financial Inclusion Department General Manager Provash Chandra Mallick signed the agreement on behalf of the Bangladesh Bank (BB).
The BB earlier formed the refinance fund to help jute growers to have fair prices and jute millers and traders in purchasing required quantity of raw jute during the season to run their mills and business.
Of the BDT 2.0 billion refinance fund, Sonali Bank will disburse BDT 310 million, Agrani Bank BDT 440 million, Janata Bank BDT 470 million, Rupali Bank BDT 420 million, BASIC Bank BDT 70 million, United Commercial Bank (UCBL) BDT 60 million, IFIC, National Bank Limited (NBL), Prime, AB and Mercantile Bank will disburse BDT 30 million each, Uttara, Bank Asia and Standard Bank will disburse BDT 20 million each while each of the One Bank and the City Bank will disburse BDT 10 million.
“The main objective of the refinancing scheme with soft condition is to revitalise the jute industries,” SK Sur Chowdhury, deputy governor of the BB, said while addressing at the deal singing ceremony.
He hoped that the jute growers will ultimately get the support from the fund when the traders will be able to utilise the loan to buy their jute. “We hope the farmers who grow jute will get the fair price of their produce after the inception of the fund.”
As per the deals, the central bank will provide loan to the banks at 5.0 percent interest rate and then the banks will charge highest 9.0 percent interest to provide the loans to jute mills in both public and private sectors.
The jute exporters and other jute traders can also borrow from the banks at the same rate of interest.
BBN/SSR/AD-26Aug14-12:59 am (BST)