Banks now can lend more than 25% of their capital to power producers
The Bangladesh Bank has withdrawn the single borrower exposure limit for the next six months in the case of lending to power producers.
From now on, banks will be allowed to extend credit to power sector borrowers, exceeding 25% of their regulatory capital, according to a circular issued by the central bank on Tuesday.
According to the Bank Company Law, the single borrower exposure limit is 25% of banks' regulatory capital, which from time to time is set by the Bangladesh Bank.
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A senior official of the central bank told The Business Standard that the companies involved in electricity production are facing a hike in generation costs because of higher dollar prices. So, the single borrower exposure limit has been lifted to maintain the continuity of power generation and supplies for the next six months.
