Overdue export bills: BB barred EFPF loans for companies

Staff Reporter :
Bangladesh Bank barred to fresh borrowing from Export Facilitation Pre-finance Fund (EFPF) to the companies having overdue export bills.

“The central bank observed that some companies take benefits of the EFPF scheme despite having overdue export bills. It’s a violation of guidelines”, said BB new circular on Tuesday.

The central Bank stated that it was found that companies or the individuals or firms concerned who secured loans under the Export Development Fund (EDF) against shipment orders but failed to bring home the export proceeds were still accessing credit facilities under the EFPF.

But if export bills, or export proceeds, remain not repatriated even after taking loans under the EDF or the EFPF, the companies or related individuals or firms will not be eligible for any fresh loans against the export orders under the EFPF, as per the circular from BB.

Earlier, in January first this year, the Bangladesh Bank formed the EFPF scheme worth Tk 100 billion to support exporters against purchase or import of raw materials.

Under this fund, an exporter is allowed to take a loan of a maximum of Tk 200 crore from the fund, which is a pre-finance scheme by nature.

Banks can avail the fund from the EFPF at an interest rate of 1.5 per cent from the central bank. The end users will pay 4 per cent to avail the fund from banks.

The government took decision on EFPF scheme to support the exporters to avoid economic fallout amid the corona virus pandemic and the Russia-Ukraine war.