Bangladesh Bank is set to establish a specialized fund to provide low-interest loans for reopening closed industrial units across the country. The initiative aims to revitalize the economy, protect labor rights, and utilize dormant production capacities.The central bank is currently drafting a comprehensive policy for this fund. Key highlights include:
Working Capital Support: Loans from this fund must be used primarily as working capital to resume operations. Eligibility: Priority will be given to factories that have existing export orders or high market demand for their products. Loan Rescheduling: If a closed factory is currently a defaulter, Bangladesh Bank will offer easy rescheduling terms before granting new funds. Exclusions: Enterprises involved in money laundering or major financial irregularities will be strictly excluded from this facility.
A critical discussion is ongoing regarding the source of the fund. To avoid printing new money which could trigger further inflation the central bank is leaning toward using government allocations rather than its own reserves.
Arif Hossain Khan, spokesperson for Bangladesh Bank, stated:
"We are currently collecting lists of closed factories from commercial banks, focusing on those with outstanding loans exceeding Tk 100 crore. After consulting with stakeholders and the government, a final policy will be issued."
The move follows a recent announcement by Prime Minister Tarique Rahman. During a May Day rally organized by Shramik Dal, the Prime Minister committed to strengthening the national economy by securing workers' rights and restarting stalled industries. He is expected to formally announce the fund's inauguration later this week.
Central bank officials noted that while similar stimulus packages were launched in 2020, a significant portion of those loans became defaulted. To prevent a recurrence, the new policy will include strict monitoring and enhanced oversight to ensure funds are used transparently for production purposes only.
