Factories needing smaller working capital to get priority

JUBAIR HASAN | Published: May 06, 2026 23:16:37

An around Tk 200-billion kiss of life to midsize industrial units remaining shut after the July-August 2024mass uprising is planned to help resume factory production and protect jobs.
The central bank may initially provide the special funds for those industries closed due to various factors, exchange-rate shock in particular, officials say. Officials of the Bangladesh Bank involved in drafting the policy say factories requiring massive financial injections to restart operations may initially be excluded from the scheme.
Instead, priority is likely to go to factories that can resume production with relatively smaller working-capital support ranging between Tk 1.0 billion and Tk3.0 billion from the sovereign investment fund.
"As part of the government's key election promise for bolstering economic growth by creating more jobs after months of sluggishness, the central bank is going to introduce a three-tier roadmap for resumption of production in the closed factories across the country in the coming days," says one BB source.
In the first phase, the banking regulator targets such industrial bases which were closed due to factors beyond control, like exchange-rate shock, and the factories that have no issues in respect of connections of utilities and machinery.
"It means the factories have everything ready but require working capital. We target such closed production units which are midsize in the first phase of the plan," says the BB official, on condition of not being quoted by name.
According to the plan, he says, the size of the working capital for the midsize factories will be more than Tk 1.0 billion. And the maximum ceiling could be Tk 3.0-Tk 4.0 billion.
The central bank is also considering strict screening conditions to stop habitual defaulters from benefiting from the facility. Businesses that previously received restructuring or rescheduling support but later defaulted again are unlikely to qualify.
However, companies that became non-performing for uncontrollable external shocks may still receive support, provided they regularise their loans under agreed conditions, according to the sources.
Bangladesh Bank is now simultaneously working on two fronts: verifying lists of nearly 1,000 closed factories submitted by banks and finalising the policy framework for the fund.
A senior Bangladesh Bank official familiar with the process says the central bank is assessing which factories are immediately viable and how much money would be needed to restart them.
"We are examining which factories can realistically be reopened quickly and the amount of financing required for each," the official told The Financial Express.
According to the officials involved in drafting the policy, the central bank plans to issue detailed circular instructing scheduled banks to form dedicated committees to evaluate applications from closed factories.
These committees will prepare assessment reports on shortlisted factories, including operational viability, machinery condition, utility connectivity and repayment capacity.
The proposals would then require approval from the respective bank board before being forwarded to Bangladesh Bank for the all-clear.
Banks will only be allowed to disburse loans after obtaining explicit approval from the central bank along with submission of the full assessment reports.
Officials say multiple safeguards are being incorporated to prevent misuse of the refinancing facility.
To prevent fund diversion by export-oriented factories, the officials say, the export proceeds will remain directly linked to the Escrow Account so that banks can automatically deduct installments once export earnings arrive in the country.
For factories producing goods for the domestic market, authorities are considering placing representatives from lending banks as advisers on company boards to strengthen oversight over fund utilisation.
Under the proposed scheme, affected factories may also qualify for term loans depending on operational needs.
Borrowers are expected to receive loans at an effective interest rate of 8.0 per cent. The lending rate may be fixed at 13 per cent, with the government considering an interest subsidy of up to 5.0-percentage points.
Bangladesh Bank will finalise the policy after receiving approval from the finance ministry regarding the subsidy mechanism.
Bangladesh Bank spokesperson Arief Hossain Khan says reopening closed factories remains a high-priority agendum for the government.
"The government is committed to restarting closed industrial units as quickly as possible," he adds.
"Bangladesh Bank is treating the issue with high importance. At the same time, we are ensuring that the funds cannot be looted or misused the way some past financial-support schemes were abused..
Closed factories requiring BMRI will come under the scheme in the third phase of the contingency plan.
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