Offshore loans on the rise

Foreign loans rose 14.33 percent through the banks' offshore banking in the last quarter of fiscal 2015-16 thanks to low interest rates.

The total outstanding foreign loans of offshore banking stood at Tk 38,087 crore in the April-June period, according to Bangladesh Bank statistics. In the previous quarter, it was Tk 33,311 crore.

Individuals or institutions can take short-term foreign loans through offshore units of commercial banks.

Usually, the loan is taken through deferring the payment against letters of credit. The tenure of the loans tends to be one year and the rate of interest a maximum of 6 percent.

As of June 30, the total loans taken through local private banks were Tk 21,336 crore. The amount of loans from foreign banks was Tk 16,632 crore. The loans taken from state-owned commercial banks were Tk 119 crore.

The multinational companies and garment factories take most of the foreign loans through the offshore units, said an official of a private bank.

Of the 56 banks, 51 have the central bank's approval for offshore banking. However, the borrowers have taken the loans through only 35 banks.