BB provides NBFIs Tk2,000cr pre-finance scheme under stimulus fund

The central bank has assured Non-bank financial institutions (NBFI) to get a bundle of facilities to improve the liquidity situation of the sector to overcome the coronavirus pandemic fallout.

The assurance was made during a meeting held on Tuesday at the Bangladesh Bank headquarters at Motijheel, Dhaka with Governor Fazle Kabir in the chair. 

The participants of the meeting said that the Bangladesh Bank has agreed to provide Tk2,000 crore for NBFI sector as a pre-finance scheme under the existing two stimulus packages. 

From the fund, NBFIs can lend businesses with 100 percent liquidity for the lending.

"Tk2,000 crore will come from the stimulus packages of Tk30,000 crore fund for large industries and service sectors and the Tk20,000 crore funds for small and medium enterprises," Mominul Islam, chairman of Bangladesh Leasing and Finance Companies Association (BLFCA) told the Business Standard.

The central bank Governor Fazle Kabir suggested NBFIs leaders collect bank guaranty to get fresh liquidity support from the central bank as the regulator cannot make any unsecured financing.

NBFIs also asked central bank's help to instruct banks not to withdraw deposit from the NBFIs until December this year. 

The Bangladesh Bank agreed to issue the instruction on September this year as most of the NBFIs are heavily depended on the deposit of banks.

"The decision that was taken at the meeting will be helpful for NBFIs. But the few NBFIs that are spoiling the image of the sector will not get the facilities," Mominul Islam said.

The central bank recently reduced the cash reserve ratio (CRR) by 100 basis points to 1.5 percent for NBFIs in an aim to ease liquidity pressure during the Covid-19 pandemic.