Bangladesh Bank cuts interest rate on loans to the RMG sector

BTJ Desk Report
Bangladesh Bank relaxes exporters’ borrowing rules

The Bangladesh Bank recently cut the interest rate on loans under a programme started in 2019 that offers funds to the RMG units to reinforce their safety system and improve environmental standards.

The initial maximum annual interest rate of 7% has now been reduced to 5%, the central bank said in a notice.

The revised interest rate will be applicable to all new and existing sub-loans under the programme.

The government constituted the fund with the central bank to support RMG factories through medium to long-term financing under the ‘Programme to Support Safety Retrofits and Environmental Upgrades in the Bangladeshi Ready-Made Garments Sector Project’ (SREUP).

The project fund size is €50 million.

The interest rate paid by participating financial institutions to the Bangladesh Bank was fixed at 2.5%.

According to the media reports, investment grants will be sanctioned on a ‘first come, first served’ basis.


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