The Bangladesh Bank will release the fund to the commercial banks while the entrepreneurs will apply for the loans by submitting estimates of the money they need to pay wages and allowances of workers and employees.
The loans carrying a 2 percent interest rate will be repayable in two years with a grace period of six months.
Finance Minister AHM Mustafa Kamal says the interest in reality is the service charge for the banks to distribute and collect repayments.
The government will not give the money from the national budget, he told bdnews24.com after a meeting with top officials at his official residence in Dhaka on Wednesday.
The finance ministry will issue Tk 50 billion bonds and the central bank will raise a refinancing fund against the bonds, he explained.
Bangladesh Bank Governor Fazle Kabir, National Board of Revenue Chairman Abu Hena Md Rahmatul Muneem, Financial Institutions Secretary Md Ashadul Islam, Finance Secretary Abdur Rouf Talukder, and Economic Relations Secretary Fatima Yasmin attended the meeting.
They finalised the guidelines for the package that the finance ministry sent to the Bangladesh Bank. Central bank spokesperson Serajul Islam said the guidelines will be issued in a circular on Thursday.
Prime Minister Sheikh Hasina on Mar 25 rolled out the economic bailout package with almost all of the funds going to the readymade garment industry that earns $34 billion annually, more than 80 percent of Bangladesh’s total export earnings.
Rubana Huq, chief of the apparel exporters’ lobby, told bdnews24.com they have been told in no unclear terms that the fund can be used only for paying wages and allowances to the workers and other employees.
After another meeting with the stakeholders at the Secretariat earlier in the day, Commerce Minister Tipu Munshi said the government has made arrangements for the apparel industry entrepreneurs to get loans at 2 percent interest as the sector is the largest exporter of Bangladesh.
“There are talks at different levels that the government is donating money to the exporting sectors. It’s not a donation. They will have to repay the loan in time. The details will be sorted out in a day or two,” he added.
He noted that the factories that have work to do can remain open but the owners must ensure protection of the workers from the virus.
Business leaders also attended the commerce ministry meeting.
In July-February period, Bangladesh exported goods worth $26.24 billion, missing the target by 13 percent with a nearly 4.8 percent year-on-year decline.
A finance ministry official told bdnews24.com that officials will convene at the Prime Minister’s Office on Thursday to discuss the impact of the pandemic on other sectors than RMG.