Bangladesh Bank has eased the conditions for wholly foreign-owned industrial firms to take foreign loans. From now on, such firms will be able to take foreign loans from their parent company, associate firms and shareholders.
A circular to this effect was issued by Bangladesh Bank on Wednesday.
The circular said that wholly foreign-owned industrial firms in specialised zones — including export processing zones (EPZs), economic zones (EZs) and hi-tech parks — as well as those in the manufacturing and service sectors operating outside such zones, would be able to take short-, medium- and long-term foreign loans, subject to set conditions.
Under the conditions, for loans of less than one year, firms outside the specialised zones may take interest-free loans for working capital without prior approval from Bangladesh Bank. Interest-bearing loans may also be taken for business needs, including procuring raw materials, at a maximum all-in cost of 3 percent a year. These loans must be repaid in a single instalment at maturity and may be rolled over for up to three years.
For loans of one to five years, firms may take interest-free loans of up to $50 million and interest-bearing loans of up to $5 million for capital expenditure such as machinery, equipment and construction. Loans of more than five years may also be taken, with a maximum annual interest rate of 3 percent where interest applies. There is also provision to convert outstanding foreign loans into equity.
Those in the sector said the new measure would ensure low-cost foreign financing for foreign-owned industrial firms and help attract more foreign investment to Bangladesh.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report