B Mirror Report:  The Bangladesh Bank is moving to roll out a special bailout fund aimed at reviving closed and idle industrial units, with priority likely to be given to factories requiring relatively smaller working-capital support to restart operations.

Officials involved in drafting the policy said the central bank is planning an around Tk 200 billion support package to help mid-sized factories resume production, particularly those shut down following the economic disruptions after the July–August 2024 mass uprising. The initiative is also expected to safeguard jobs and revive sluggish industrial activity.

Under the proposed framework, factories that can restart operations with working capital in the range of Tk 1.0 billion to Tk 3.0 billion are likely to receive priority in the first phase. Larger units requiring substantial capital injections may be considered in later phases.

A senior Bangladesh Bank official said the initial focus is on viable industrial units that are structurally ready but currently lack liquidity. “We are prioritising factories that have infrastructure, machinery and utility connections in place, but are facing working capital shortages,” the official noted.

The central bank is designing a three-tier recovery roadmap to restart closed factories across the country. The first phase will target industries affected by external shocks such as exchange-rate volatility and other uncontrollable factors.

According to officials, nearly 1,000 closed factories have been identified through data submitted by scheduled banks. The Bangladesh Bank is currently reviewing these cases to assess operational viability, funding requirements and repayment capacity.

Banks will be instructed to form dedicated committees to evaluate applications. These committees will prepare detailed assessments covering machinery condition, utility connectivity and financial feasibility before forwarding proposals to the central bank for final approval.

To ensure strict oversight, disbursement of funds will only be allowed after Bangladesh Bank approval. Additional safeguards are being introduced to prevent misuse of the facility, including mechanisms to track fund utilisation.

For export-oriented factories, export proceeds will be linked to escrow accounts to enable automatic loan repayment deductions. For domestic market-oriented firms, bank representatives may be placed as observers on company boards to strengthen monitoring.

The proposed scheme may also offer term loans at an effective interest rate of around 8 per cent, with a government subsidy potentially covering up to 5 percentage points of the lending rate.

Bangladesh Bank officials said a strict screening mechanism will be applied to prevent habitual defaulters from accessing the fund. However, firms affected by genuine external shocks may still qualify if they regularise outstanding obligations under agreed terms.

Bangladesh Bank spokesperson Arief Hossain Khan said restarting closed factories remains a top priority for the government. “We are committed to bringing idle industrial units back into operation while ensuring strong safeguards against fund misuse,” he said.

The central bank is expected to finalise the policy framework after receiving approval from the finance ministry regarding the proposed interest subsidy structure.