Central Bank extends loan repayment time of Sri Lanka by 1 year
A loan worth $200 million was provided to Sri Lanka in three phases
The Bangladesh Bank has extended the repayment time of a loan worth $200 million provided to Sri Lanka by one more year, considering the dire straits of the country at present.
This decision was taken at the board meeting of the central bank on Sunday.
Sri Lanka was given a loan from the central bank's reserves to overcome the economic crisis.
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In the first instalment, the country was paid $50 million on 18 August and another $100 million in the second instalment on 30 August. Later, $50 million more was paid.
A central bank official said the deadline for Sri Lanka to pay $50 million was 18 May, $100 million is due on 31 May and the remaining $50 million is due on 12 June.
The loans have to be repaid in a "currency swap" system.
Sri Lanka was given three months to pay the first instalment and at that time the interest rate was LIBOR+2%. LIBOR or London Interbank Offered Rate is the conventional interest rate for short-term lending in the international arena.
Sri Lanka was given three more months to repay the loan in the first three months. However, the interest rate was kept the same for the second three months. For the new six-month period, the interest rate will be LIBOR+2.5%.
Eastern Bank fined Tk5 lakh, waiver application rejected
At the board meeting on Sunday, Eastern Bank Ltd (EBL) was fined Tk5 lakh for giving an extra loan beyond the limit, rejecting the bank's request for a waiver.
A senior central bank official, who was present at the board meeting, told The Business Standard that the bank is a sensitive institution and there is no room for error here. So, anyone making a mistake will be punished so that no one makes such a mistake.
Earlier, the Bangladesh Bank fined Eastern Bank Tk5 lakh on 3 April. The bank was asked to pay the fine within 14 days otherwise, a letter would be sent to the managing director informing them that the amount would be deducted from the bank's account.
EBL applied for a waiver without paying the fine.
EBL provided loans to its affiliates EBL Finance (HK) Limited and EBL Securities beyond the credit limit without any approval from the central bank. The bank gave an explanation on it 19 December, which the central bank did not accept.
As per the Bank Company Act 26 (Kha), the loan amount provided to an individual, company or group cannot be more than 25% of the capital reserve of the bank.
In the meeting, the central bank also agreed to the request for an extension of time to increase the paid-up capital of Bengal Commercial Bank to Tk500 crore.
