Projects undertaken with bank loans will now have to open an escrow account or revenue account with the lending banks to deposit earnings or sales proceeds from the respective projects.
In cases of any syndicated financing, such accounts will have to be opened with the lead bank for this purpose.
Bangladesh Bank issued the instructions on Thursday to make loan realisation risk free and ensure proper monitoring of the loan accounts, according to a circular.
It mentioned that some borrowers were not depositing the project earnings or sales proceeds with the lending banks, intensifying the realisation risks and affecting loan monitoring.
The central bank asked to ensure monitoring so that the project earnings and sales proceeds are deposited with the lending banks.
However, the amount of project earnings in excess of loan installment could be deposited with other banks or financial institutions subject to obtaining no-objection certificate from the lending banks.
A senior BB official said the conventional practice is that the projects maintain such accounts with the lending banks.
However, there are some exceptional cases identified recently by the BB that the projects are violating the standard norm.
jasimharoon@yahoo.com