Dhaka, Bangladesh (BBN)- The central bank of Bangladesh said it will not allocate an additional BDT 2.0 billion sought under its refinancing scheme for housing sector at the moment.

“It’s a revolving fund. So, the board will take a decision on further allocation only after disbursement of the entire amount in the fund,” a senior official of the Bangladesh Bank (BB) told BBN after the meeting, adding that a proposal was placed with the board seeking approval for the extra fund to meet the growing demand for the loan.

The decision came at a meeting of the BB board of directors held at the central bank on Wednesday with the BB Governor Atiur Rahman in the chair, the BB officials said.

Over BDT 4.0 billion has been disbursed by commercial banks and non-banking financial institutions (NBFIs) from the BDT 5.0 billion fund.

On April 12 last, the central bank increased its refinancing fund for housing loans to Tk 5.0 billion from BDT 3.0 billion following expansion of the areas under the scheme in Dhaka city.

The BB had relaxed its rules and regulations concerning expansion of areas close to Dhaka City Corporation like Uttar Khan and Dakkhin Khan under the scheme for providing loans.

The people who are living in six city corporations and the municipal areas of Tongi, Savar, Gazipur and Narayanganj are eligible for such loan facilities.

Under the BB scheme, an applicant having a monthly income up to BDT 50,000 will be entitled to a loan of maximum BDT 2.0 million at 9.0 percent interest.

Currently, the banks normally provide loans to the housing sector at interest rates ranging between 12.50 percent and 13.00 percent, according to the central bank statistics.

The repayment period of a loan under the refinancing scheme is 20 years with a maximum grace period of one year.

BBN/SS/SI/AD-29October09-12:51 am (BST)