Banks have been relieved from the applicable regulation of the Banking Companies Act 1991 while giving soft loans to export-oriented firms from the Tk5,000-crore stimulus package
The single borrower limit will not apply to export-oriented factories that will take soft loans to pay wages and allowances of workers, the Bangladesh Bank said in a directive issued on Saturday.
The banks have been relieved from the provision of Section 26 (b) (1) of the Banking Companies Act 1991 while giving soft loans to export-oriented firms from the Tk5,000-crore stimulus package.
A bank can lend a maximum 35 percent of its capital to an individual or business entity or group. Of this, it can lend a maximum 15 percent of the funded loan and 20 percent of the non-funded loan, as a guarantee, to a single borrower.
The Bangladesh Bank provided the modality of disbursement for the stimulus fund of Covid-19 affected export companies in a circular issued on April 2.
On Saturday, the central bank gave a new instruction that the single borrower limit will be inapplicable for export-oriented factories while taking loans from the fund.
But these companies will only be able to spend the loan from the government's Tk5,000 crore stimulus package to pay wages of their workers and labourers – not officials.
The wages will be directly disbursed to employee bank accounts, including mobile banking accounts.
The borrowers will be able to pay three months' wages, from April to June, with the loan.
As per the central bank, the loan can only be used for salary payments of factories that export at least 80 percent of its products.
The government will give the central bank Tk5,000 crore from its budget allocation to distribute the funds to banks based on the need of the affected exported-oriented companies, said the Bangladesh Bank circular.
To contain the coronavirus outbreak in Bangladesh, the government declared general holidays from March 26, which were recently extended to April 25.