BB asks banks to fix interest of pre-shipment loans as per new rate
The Bangladesh Bank (BB) has asked banks to fix the interest rate of pre-shipment loans as per the new reference lending rate.
The central bank asked the banks to add a maximum of 2 percent margin with the reference lending rate, known as SMART (six-month moving average rate of treasury bill), when they fix the interest rate of pre-shipment export credits, according to a circular issued today.
The Bangladesh Bank took the decision to make the export-oriented companies more resilient against shocks stemming from the ongoing global economic crisis, helping them thrive and ensuring a more efficient credit management in the banking sector.
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The pre-shipment credit is a loan granted to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment.
In June, the central bank introduced the market-driven lending rate for banks and non-banking financial institutions, replacing the 9 percent lending rate cap that had been in place since April 2020.
If all instalments of a loan or partial instalments are categorised as overdue, a maximum of 1.5 percent penalty interest can be slapped on the entire loan outstanding of a working capital loan or the instalments of a demand loan that are behind the schedule.
