Businesses seek relaxed conditions, withdrawal of 2% cash deposit requirement for incentive loans

Business leaders have called for the relaxation of conditions for accessing incentive loans and the withdrawal of the requirement to deposit 2% in cash to become eligible for relief from default status.

They made the demands at a meeting between the Bangladesh Bank and representatives of several leading business organisations on Tuesday, where they also sought faster processing and disbursement of loans under the central bank’s Tk20,000 crore incentive fund.

Business representatives said entrepreneurs seeking loans to reopen closed factories are facing delays and procedural complications at banks. They pointed to lengthy waits for board meetings, demands for additional documents and delays in making decisions on loan applications.

They urged banks to expedite the process and hold weekly or special board meetings, when necessary, so that applications can be resolved without prolonged delays.

Representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), Bangladesh Chamber of Associations (BCA), Bangladesh Employers’ Federation (BEF), Bangladesh Jute Association (BJA) and Metropolitan Chamber of Commerce and Industry (MCCI) attended the meeting.

Bangladesh Bank Deputy Governors Md Kabir Ahmed and Md Sarwar Hossain, along with officials from the relevant departments, represented the central bank.

The meeting reviewed the implementation of various incentive programmes introduced by the government and Bangladesh Bank. Participants also examined whether the policies issued for the programmes contain any gaps or ambiguities and stressed the need to identify genuinely affected businesses and provide them with timely assistance.

Business leaders said delays in bank board meetings were a major obstacle to processing applications. In some cases, they said, it takes up to a month for a board meeting to be held.

They also called for an end to unnecessary demands for additional documents and urged banks to speed up decision-making on loan applications.

Bangladesh Bank officials said successful implementation of the incentive programmes is a shared responsibility of all stakeholders. They stressed the need for coordinated efforts to ensure that genuinely affected businesses receive support quickly while ensuring proper use of the funds allocated under the incentive packages.

The business organisations also called for proper scrutiny before issuing no-objection certificates (NOCs).

BKMEA President Mohammad Hatem told reporters that businesses are interested in taking advantage of the Tk20,000 crore incentive package, but many entrepreneurs are unable to apply because of a lack of cooperation from banks.

“Many banks are reluctant to accept applications, while some are discouraging entrepreneurs by citing various reasons,” he said.

Hatem said some provisions in Bangladesh Bank’s circular have created complications and urged the central bank to resolve them quickly and settle the applications that have already been submitted.

He added that Bangladesh Bank had assured the business community that the issues would be addressed promptly.

In May, Bangladesh Bank announced a total fund of Tk62,000 crore to help reopen closed factories and revive economic activity. Loans under the programme will be provided to entrepreneurs in various sectors at interest rates of up to 7%.

The central bank had said the initiative was expected to create employment opportunities for around 2.5 million people. However, business leaders say the programme has yet to produce any significant impact on the economy, even four months after its announcement.

According to Bangladesh Bank data, only Tk50 crore has so far been disbursed from the Tk20,000 crore fund. Loan disbursement under the other components of the broader programme has also remained sluggish.