B Mirror Report: Bangladesh Bank (BB) has launched a Tk 20,000 crore revolving pre-finance scheme designed to help revive closed industrial and service-sector enterprises, support employment, and promote export diversification.

The central bank announced the initiative through a circular issued by its Banking Regulation and Policy Department (BRPD) on Thursday. The scheme, titled “Closed Industry and Service Sector Facilitation Pre-finance Scheme,” will provide working capital assistance to large industrial and service-sector entities that have either shut down fully or partially, or are unable to utilize their production capacity due to financial difficulties.

According to the circular, the fund will be financed from the surplus liquidity of scheduled banks and will operate as a revolving facility for three years under the supervision of BRPD Section-3.

Large-scale industrial and service-sector enterprises, as defined in the National Industrial Policy, will be eligible for financing. Export-oriented industries and businesses involved in deemed exports will receive priority, while entrepreneurs or companies seeking to lease or acquire closed industrial units for restarting operations will also be given preference.

To ensure prudent use of the facility, Bangladesh Bank has introduced strict eligibility criteria. Borrowers listed as loan defaulters in the Credit Information Bureau (CIB) database will be excluded from the scheme. Participating banks will also be required to verify that applicants have no record of money laundering, financial fraud, or diversion of funds.

Under the scheme, Bangladesh Bank will lend funds to scheduled banks at an interest rate of 4 percent, while the maximum lending rate for borrowers has been capped at 7 percent. Businesses will also benefit from a six-month grace period before interest payments begin, allowing time to restart operations.

The maximum outstanding loan exposure for a single borrower or business group has been set at Tk 200 crore. Loans will have a tenure of up to one year and may be renewed based on business performance and fund availability.

The financing may be used for paying workers’ wages and allowances for up to four months, settling utility bills such as electricity and gas, purchasing raw materials, fulfilling export orders, and meeting other production-related expenses.

To strengthen transparency, workers’ salaries and allowances must be paid directly through bank accounts or mobile financial services (MFS) accounts. Cash disbursements will not be allowed, and banks must verify workers’ National Identification (NID) numbers before releasing salary-related funds.

The central bank has prohibited the use of the facility for adjusting, rescheduling, or repaying existing loans.

As part of its monitoring mechanism, participating banks will be required to conduct quarterly inspections of financed factories and collect weekly reports on sales and revenue generation. Any misuse of funds will result in an additional penalty interest of 2 percent on top of the applicable rate.

Bangladesh Bank also said it reserves the right to conduct on-site inspections at any stage to ensure that the funds are being used for their intended purposes.