The Bangladesh Bank has extended the tenure of the increased limit of loans given to exporters from its Export Development Fund (EDF) till December this year.
Usually, a client can borrow up to $25 million from the fund. However, in a directive in May 2020, the limit was increased to $30 million for the members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA).
According to that directive, the deadline was fixed for December 2020. Since then, the increased credit facility has been extended regularly.
As per a new circular issued on Tuesday by the Foreign Exchange Policy Department of the central bank, exporters will enjoy the facility till 31 December 2022.
Another circular issued by the same department on the same day said that the EDF loans would have to be repaid with the borrowers' export earnings or foreign exchange reserves.
After 19 July 2022, the companies – which will repay EDF liabilities by creating loans in taka – will not receive the EDF facility in the future.
If the export payment is not made on time, some banks can create a loan in taka for the client and use it to pay the loan taken from the EDF.
In a directive in June this year, it is said that if such an incident occurs in the case of an exporter within the last six months, then the EDF loan applications of these exporters should not be sent to the Bangladesh Bank.
According to the new guidelines, the central bank has taken tougher steps for such customers.