BB eases accessing foreign loans by foreign companies

Foreign-owned service companies can now avail short-term loans as working capital from their parent companies and shareholders

The Bangladesh Bank has brought further flexibility in accessing foreign loans by the foreign-owned companies operating in Bangladesh.

The foreign-owned service companies can now avail short-term loans as working capital from their parent companies and shareholders for emergency business needs, according to a notice issued by the central bank’s Foreign Exchange Policy Department (FEPD).

Earlier, such loans were applicable only for foreign-owned industrial enterprises engaged in manufacturing activities. No service or trading companies were allowed take such loans.

But now service companies can take such loans, too.

The central bank also said that such loan may be admissible in convertible foreign currencies for six years at most from the date of inception of manufacturing and or service output activities with options to renew or extend the tenure within the applicable period.

Borrowing enterprises may pay interest at the rate of 3 percent per annum at most until further directives, the BB said, adding that the other relevant instructions regarding transactions will remain unchanged.