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.