BB extends Tk2,000cr refinance scheme for shipbuilding by December

Bangladesh Bank has extended its Tk2,000 crore refinance scheme for the shipbuilding sector until December 2026, aiming to support industry expansion and boost export earnings.

A circular issued today (8 February) said the decision was taken considering the sector's potential to enhance exports alongside its development, operation and capacity expansion. 

The scheme's earlier tenure expired in June 2024.

All scheduled banks operating in Bangladesh will be eligible to access the facility, subject to signing a participation agreement with the central bank's Banking Regulation and Policy Department-3, which will oversee operational activities.

Banks must follow the circular's guidelines on refinance applications, documentation and fund management. 

According to the circular, while lenders may approve loans or investments for clients under their own policies, they are required to confirm fund availability with the central bank before sanctioning loans under the scheme, submitting relevant disbursement and repayment timetables.

The directive also states that after ensuring proper utilisation of the, participating banks will release funds to clients in instalments and subsequently apply to Bangladesh Bank for refinancing. 

For Shariah-based Islamic banks and Islamic banking windows, investments under the scheme can be made using their approved investment modes.

Shipbuilding industry insiders say the extension is expected to ease long-term financing constraints for shipbuilders and strengthen the industry's export-oriented capacity.

In 2022, the central bank had formed a Tk2,000 crore refinance scheme to ensure sustainable development of the shipping industry, increase export earnings.