Fourteen banks on Monday signed a participation agreement with the Bangladesh Bank to disburse Tk15,000 crore in loans as part of refinancing facilities to support implementation of the stimulus package for large industries.

The banks are Sonali Bank, Rupali Bank, Agrani Bank, Dhaka Bank, Mercantile Bank, Trust Bank, Southeast Bank, Shahjalal Islami Bank, One Bank, South Bangla Agriculture and Commerce (SBAC) Bank, NRB Commercial Bank, NRB Global Bank, Union Bank and the Commercial Bank of Ceylon PLC.

In a bid to foster economic recovery, the government has declared a Tk30,000 crore stimulus package for large industries and the service sector entities affected by the novel coronavirus. The banks will arrange the funds from their own sources.

To support implementation of the package, the Bangladesh Bank has formed a Tk15,000 crore revolving refinance scheme.

Under this scheme, banks and non-bank financial institutions (NBFIs) will be entitled to get funds from the central bank’s refinance scheme at four percent interest.

Banks and NBFIs will get 50 percent as refinance from the Bangladesh Bank against the loans they disburse to affected industries and service sector entities.

To get the fund from the scheme, the banks or NBFIs would have to sign a participation agreement with the central bank, according to a circular.

The refinance facility will only be issued against the working capital provided by the banks to sectors allowed by the Bangladesh Bank, the circular reads.

Earlier, on April 12 this year, the central bank – in line with the government’s announcement – issued guidelines on issuing working capital facility to industries and service sector entities affected by the pandemic, setting the interest rate ceiling at nine percent.

Of the nine percent interest, the government will provide 4.5 percent as a subsidy, and the remaining 4.5 percent will be paid by the borrowers.