BB asks banks to disburse stimulus fund to CMSME by October
Spacial Correspondent || Published: 2020-08-17 16:53:04 || Updated: 2020-08-17 16:53:04
Bangladesh Bank yesterday asked banks to disburse from Tk20,000 crore stimulus funds for the cottage, micro, small and medium enterprise (CMSME) sector by October, this year. Previously, the deadline was at August.
The central bank came up with the decision after an online meeting on Monday with the banks and non-bank financial institutions (NBFIs) that were slow to disburse from stimulus funds.
Bangladesh Bank Governor Fazle Kabir presided over the meeting; while fifteen banks and four NBFIs were present.
“Bangladesh Bank governor instructed banks to disburse loans from Tk20,000 crore stimulus funds for CMSME sector by October 31, this year,” said Bangladesh Bank spokesperson and executive director Md. Serajul Islam.
He said that banks and NBFIs requested the governor to extend the deadline till December, this year to disburse funds from the package but governor extended the deadline till October this year.
BB governor strictly instructed banks to disburse the funds within the deadline and it would not further extended, Md. Serajul Islam said to Sunbd.
Fifteen banks and four NBFIs that loans disbursement target was Tk300 crore and below, were attended the virtual meeting, he said.
Banks and NBFIs to get time till October 31 to disburse stimulus funds for CMSME sector but the deadline to disburse from Tk30,000 crore stimulus for large industries was August, said a meeting source.
On April 13 this year, the BB in line with the government’s announcement issued guidelines on providing working capital facilities amounting to Tk20,000 crore to the cottage, micro, small and medium enterprise (CMSME) sector affected by the coronavirus pandemic, setting the interest rate ceiling at 9%.
Of the 9% interest, the government will bear 5% as subsidy and the remaining 4% will be borne by borrowers.
But banks and NBFIs were lending slowly to businesses belonging to the cottage, micro, small and medium enterprise (CMSME) sector.
Then, On July 02, Bangladesh Bank asked banks to disburse all stimulus funds announced by the government by August of this year.
To encourage lending to the CMSME sector, BB introduced a credit guarantee scheme on July 23, for the first time. However, the banks and NBFIs are reluctant to disburse loans to the sector.
As of July 30, the banks and NBFIs disbursed only Tk1,500 crore of the total Tk20,000 crore stimulus funds for CMSME sector, as per BB data.
Talking a managing director of a private commercial bank said that this is not possible to disburse the stimulus funds by October 31, this year, because we are disbursing the loans after verifications.
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