Sick industries to get loans at banks’ cost of fund

Bangladesh Bank has given go-ahead to scheduled banks to impose interest on sick industries' loan amount at the highest rate of their cost of fund.

To get the benefits the sick industries need to apply to their respective banks within June 30 of this year, according to a circular issued by the central bank today.

Only sick industries which made it to the list of the industries ministry will be allowed to apply, except the sick textile companies, it said.

Before the application, the industries are ordered to submit a down payment.

Earlier in October, the banking watchdog issued a circular relaxing loan repayment policy for sick industries enlisted by the commerce ministry such that the beleaguered businesses can refund their loans on easy conditions.

If a sick industry pays 2.5 per cent down payment of the principal amount of loans, they will be eligible to get a rebate on the whole interest payment, according to that Bangladesh Bank notice.

After rebating the interest, banks will have to impose the interest rate on the remaining principal amount equivalent to their cost of fund.

The central bank termed the opportunity as a one-time exit facility for the businesses, which are now in a defaulted zone.