The Bangladesh Bank on Wednesday clarified this clause of the circular it issued on April 2, regarding the disbursement process guideline of the incentive
The government's Tk5,000 crore ($588m) stimulus package for export-oriented industries will be spent explicitly to pay wages to workers and labourers, not to officials.
The Bangladesh Bank on Wednesday clarified this clause of the circular it issued on April 2, regarding the guideline for disbursement of the incentive.
Export-oriented factories, which export at least 80 percent of their products, can apply for the incentive as a soft loan from the stimulus fund to provide wages to their labourers and workers.
The central bank also suggested banks to deduct income tax and payment of provident funds while transferring wages to their accounts. The central bank has also clarified that if any factory has made its business transactions through multiple banks, it can apply for a syndication loan.
The government will provide the central bank with Tk5,000 crore from its budget allocation to distribute the funds to the banks based on the demand from the affected industries, said the Bangladesh Bank's previous circular.
The central bank will not charge any interest against the loan, but commercial banks can take a maximum 2 percent service charge on their lending.
The incentive will go directly to the employees' bank accounts, including mobile banking accounts. If any employee does not have an account, banks can open a new account with their birth certificates.
A borrowing factory can pay three months' salaries (April, May and June) with the loan. The loan repayment period is two years, including a six-month grace period.