BB confiscates banks’ interest income for Apr, May
The central bank yesterday directed banks to transfer all interest accrued or to be accrued between April 1 and May 31 this year from all of their loans to an interest-free blocked account, in what can be construed as its boldest move yet amid the pandemic. A blocked account refers to an account that does not allow for the indiscriminate withdrawal but instead has certain restrictions or limitations on when, how much, and by who, capital can be withdrawn. Besides, banks are not allowed to transfer the interest or profits deposited in the blocked account of the borrowers to lenders’ income book until further notice, according to a Bangladesh Bank notice. This is a great move to help the borrowers during the ongoing fallout as banks are not permitted to impose compound interest on the total outstanding loans of the businesses. The fund — Refinance Scheme for Green Products/Initiatives/Project — would stand at Tk 400 crore from Tk 200 crore now as the demand for the funds for environment-friendly initiatives is growing. The scheme can only be used in case of term loans and can’t be used to pay consultant fee, meet repairing and maintenance expenditure and be used as working capital. Similarly, the refinancing wouldn’t go past the credit ceiling set by the BB for the products and projects. At the borrowers’ level, the interest rate for the loans with the repayment period of less than five years would be a maximum 7 per cent. The loans with payback tenures ranging between five years and eight years would carry a 7.5 per cent interest rate and that of more than eight years tenure would be 8 per cent. This will give banks’ a margin of 2 per cent, 2.5 per cent and 3 per cent respectively for the three repayment periods. However, the margin for the loan going to the agriculture sector’s solar irrigation pump would be 2 per cent as it is a priority sector for the government. No hidden charges can be applied to any loans, the BB said. The grace period would be determined depending on the relationship between banks and clients. The loan repayment would be on a quarterly basis and the loan and equity ratio would be 80:20. The government and the Bangladesh Bank have unveiled a host of stimulus packages amounting Tk 95,619 crore, which is 3.5 per cent of the GDP, aimed at aiding people’s purchasing power, widening social safety nets, increasing money supply and making working capital available for the industries, service sector firms and cottage industries.
Govt to import 0.8m tonnes of fertiliser in next FY
The government will import over 0.8 million tonnes of fertiliser during the next fiscal year (FY) 2020-2021 to meet its demand in the country, according to an official document of the agriculture ministry. The agriculture ministry has set the target to bring in fertiliser under private initiative with subsidies As part of the move, the government will import 0.6 million tonnes of DAP fertiliser, 0.2 million tonnes of MOP fertiliser and 40,000 tonnes of powder MAP under private initiative. The shipments of fertilisers will have to be completed within August 30, 2020 for DAP and powder MAP and September 30, 2020 for MOP respectively. Imported fertiliser will be preserved in four storing places–5 per cent in Chattogram, 30 per cent in Narayanganj, 35 per cent in Nagarbari and 30 per cent in Noapara. Imported fertiliser will also be stored in other ‘mokams’ after informing the government authorities and ministry concerned about it. Private fertiliser importers/authorities will submit their import proposal in a specific box that will be set up at the Bangladesh Secretariat or Bangladesh Agricultural Development Corporation (BADC) from 10 am to 1.0 pm on May 19, 2020. The country requires more or less 5.0 million tonnes of different types of fertilisers annually, a high official of the ministry told the FE on Wednesday last. He, however, said the country produces 0.8-1.0 million tonnes of urea and 0.1 million tonnes of Triple Super Phosphate or TSP respectively.
DSE to seek permission from BSEC today
Dhaka Stock Exchange (DSE) will seek permission today (Monday) from the securities regulator to resume trading on May 10. The premier bourse DSE will send a letter to the Bangladesh Securities and Exchange Commission (BSEC) seeking its approval required to resume trading amid the ongoing general holiday. Trading on both the bourses remained closed from March 26 following the public holiday and lockdown announced by the government to contain the spread of COVID-19. Later, the closure of trading was extended till May 5 following extension of the public holiday. The DSE has moved to resume trading following some criticisms over the closure of their trading, despite trading in the stock exchanges of other countries remains open. Meanwhile, the officials said the ongoing general holiday is set to be extended till May 16. The BSEC will consider the proposal after justifying it.
Bank Asia distributes free reaper machines to farmers
Bank Asia distributed free reaper machines to farmers as a support to overcome labour crisis due to current COVID-19 pandemic, said a statement. To support the farmers, a fund was raised by the donation of bank’s officials. Six reaper machines were distributed among the farmers of Rajshahi and Naogaon districts at Mondumala, Rajshahi, recently. Each reaper machine is able to harvest crops of three bighas of land in an hour.
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