BB tightens grip on EFPF loans for errant borrowers

The central bank has tightened provisions for borrowers, looking to get fresh loans under a Tk 100 billion Export Facilitation Pre-finance Fund (EFPF), if they fail to repatriate export proceeds.

In a circular on Tuesday, Bangladesh Bank (BB) stated that it was found that companies or the individuals or firms concerned who secured loans under the Export Development Fund (EDF) against shipment orders but failed to bring home the export proceeds were still accessing credit facilities under the EFPF.

But if export bills, or export proceeds, remain unrepatriated even after taking loans under the EDF or the EFPF, the companies or related individuals or firms will not be eligible for any fresh loans against the export orders under the EFPF, stated the circular.

Earlier on January 1 last, the BB rolled out the EFPF in order to help exporters gear up their business. Under the scheme, an exporter is allowed to take a loan to the tune of a maximum of Tk 2.0 billion from the fund.

The borrowers would be able to access new loans under the new fund, even if they fail to repatriate their export bills on time for unforeseen reasons. In such a situation, the exporters will have to repay at least 50 per cent of their overdue payments before enjoying the loan facility.

jubairfe1980@gmail.com