Staff reporter:
Bangladesh Bank (BB) has converted its Taka 20,000
crore support facility for closed industrial and service sector enterprises
from a pre-finance scheme into a re-finance scheme, aiming to expedite the
revival of non-operational businesses and ensure greater transparency in the
use of funds.
The central bank issued a circular letter today, introducing a number of
amendments to the existing policy framework to streamline fund disbursement,
strengthen borrower accountability and improve monitoring of credit
facilities extended under the scheme.
Under the revised arrangement, the facility, previously known as the ‘Closed
Industry and Service Sector Facilitation Pre-finance Scheme’, has been
renamed the ‘Closed Industry and Service Sector Facilitation Re-finance
Scheme’, or BSS Re-finance Scheme.
As per the new mechanism, participating scheduled banks will have to disburse
loans or investments from their own funds first and subsequently apply to
Bangladesh Bank for reimbursement.
The circular requires banks to obtain formal approval from their respective
boards of directors or board executive committees before disbursing funds
under the scheme.
Banks will have to submit applications for refinancing to the Director of the
Banking Regulations and Policy Department-3 (BRPD-3) at Bangladesh Bank’s
head office within the following week of loan disbursement.
However, if a bank fails to submit the application within the stipulated
period due to unavoidable circumstances, it may submit the application within
an additional 15 days, providing a written explanation with valid reasons for
the delay.
The central bank has also introduced stricter borrower eligibility
requirements to prevent misuse of the facility.
Under the amended policy, banks must obtain a written declaration from
prospective borrowers confirming that they have not been involved in money
laundering, forgery or fraud, fund diversion, or misuse of loan funds.
The declaration will be mandatory before sanctioning any loan or investment
under the scheme.
The circular also gives priority to borrowers applying through the scheduled
bank from which they originally obtained project loans, aiming to facilitate
the assessment process and accelerate financing for the revival of closed
enterprises.
To ensure proper utilisation of funds and strengthen financial monitoring,
all disbursements, project-related expenditures and revenue transactions
under the scheme must be conducted through dedicated escrow or revenue
accounts.
Banks will also have to comply with the instructions issued under BRPD
Circular No. 01, dated January 18, 2024, concerning the opening and operation
of project income accounts.
The revised directive further requires participating banks to submit
refinancing applications using the prescribed format, Annexure-Ka, along with
relevant documents, including credit appraisal reports, board approval and
borrower declarations.
Bangladesh Bank has also amended the existing participation agreements with
scheduled banks to bring them in line with the revised re-financing
mechanism.
Accordingly, references to the pre-finance scheme in earlier circulars,
operational guidelines and related agreements will be replaced by the re-
finance scheme.
The amendments will apply to the existing regulatory framework introduced
through BRPD Circular No. 13, dated June 4, 2026, BRPD-3 Circular Letter No.
01, dated July 7, 2026, and BRPD Circular Letter No. 32, dated September 17,
2026.
