BB offers $100m oil refinancing facility to Agrani Bank

FE Team | Published: November 07, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Bangladesh Bank (BB) has opened a special window for providing credit support to nationalised commercial banks (NCBs) to help import petroleum products by the Bangladesh Petroleum Corporation (BPC).
The central bank issued an offer letter to the Agrani Bank Tuesday asking it to avail US$100 million foreign currency loan under the new re-financing scheme specially designed to finance the import of petroleum products.
"We will release the fund after receiving acceptance letter from the Agrani Bank," a BB senior official told the FE Tuesday, adding that the foreign currency loan will help settle import bills for gasoline products.
He also said the central bank will consider providing such credit facilities to the Sonali and Janata banks after receiving their loan proposals.
Earlier, the BB agreed to provide US$300 million credit facility to the three NCBs - Sonali, Janata and Agrani - to help the state-owned BPC finance fuel oil import.
"We have received an offer letter from the central bank for availing such foreign currency facility to finance import petroleum products," a senior official of the Agrani Bank told the FE.
He also said the Agrani Bank will submit their acceptance letter to the central bank by the end of this week requesting to release the fund.
The Agrani Bank earlier sought $100 million from the BB for period of one-year to finance the oil import.
The Ministry of Power, Energy and Mineral Resources had requested the central bank for taking measures for facilitating the import of fuel oils.
In the first two months of the current fiscal, the BPC incurred a loss of Tk 3.77 billion. Of the amount, Tk 1.60 billion was in June and Tk 2.17 billion in July.
Energy division sources feared that if such trend continued, the cumulative loss would stand at nearly Tk 13.0 billion by the end of this fiscal.
The BPC has been incurring huge financial losses due to the mismatch between the selling and the purchasing prices of the fuel. It has been selling fuels at prices lower than their import costs.
The state-owned enterprise that was once a profitable entity suffered losses worth Tk 24.45 billion last year. It imports nearly 3.8 million tonnes of fuel from different oil-rich countries.