Dhaka, Bangladesh (BBN)– Bangladesh Bank (BB) signed separate agreements with six more private commercial banks (PCBs) on Wednesday to facilitate long-term financing under the World Bank funded Financial Sector Support Project (FSSP).
Under the deals, the six banks – Dutch Bangla Bank Limited, IFIC Bank Limited, South East Bank Limited, Standard Bank Limited, Trust Bank Limited, and Standard Chartered Bank – are allowed to provide long-term financing for projects in manufacturing sectors.
The central bank earlier signed similar agreement with other 10 banks. The banks include Mutual Trust Bank Limited, Prime Bank Limited, One Bank Limited, Al-Arafah Islami Bank Limited, Eastern Bank Limited, United Commercial Bank Limited, Dhaka Bank Limited, Bank Asia Limited, Social Islami Bank Limited and Export Import Bank of Bangladesh Limited.
Addressing the agreement signing ceremony at the central bank headquarters in the capital Dhaka, BB Deputy Governor Nazneen Sultana said that the central bank under the auspices of International Development Association (IDA) of the World Bank would provide $300 million through FSSP, which would play pivotal role in meeting the growing demand for long-term financing for productive sectors in the country.
Under FSSP fund for long-term financing, the banks can lend money for ventures in the industrial productive sectors for tenure of 3 to 10 years. The banks will have to pay interest rate between 3.25 per cent and 4.25 per cent to the central bank to use the refinance fund.
The interest rate will be set considering the respective banks’ CAMELS rating.
The banks will impose maximum three per cent interest rate spread to disburse the loan to the entrepreneurs meaning that the importers will be able to receive the loan from the banks by giving interest rate no more than 6.25 per cent.
Among others, Executive Director (FSSP) of BB, Md. Ahsan Ullah and the managing directors and chief executive officers of the six participating banks spoke on the occasion.