Dhaka, Nov 5, (V7N) – Bangladesh Bank (BB) has converted its Taka 20,000 crore support facility for closed industrial and service sector enterprises from a pre-finance scheme into a re-finance scheme, aiming to expedite the revival of non-operational businesses and ensure greater transparency in the use of funds.
The central bank issued a circular on Thursday introducing a number of amendments to the existing policy framework to streamline fund disbursement, strengthen borrower accountability and improve monitoring of credit facilities extended under the scheme.
Under the revised arrangement, the facility, previously known as the "Closed Industry and Service Sector Facilitation Pre-finance Scheme," has been renamed the "Closed Industry and Service Sector Facilitation Re-finance Scheme," or BSS Re-finance Scheme.
As per the new mechanism, participating scheduled banks will have to disburse loans or investments from their own funds first and subsequently apply to Bangladesh Bank for reimbursement. The circular requires banks to obtain formal approval from their respective boards of directors or board executive committees before disbursing funds under the scheme.
Banks will have to submit applications for refinancing to the Director of the Banking Regulations and Policy Department-3 (BRPD-3) at Bangladesh Bank's head office within the week following loan disbursement. However, if a bank fails to submit the application within the stipulated period due to unavoidable circumstances, it may submit the application within an additional 15 days, providing a written explanation with valid reasons for the delay.
The central bank has also introduced stricter borrower eligibility requirements to prevent misuse of the facility. Under the amended policy, banks must obtain a written declaration from prospective borrowers confirming that they have not been involved in money laundering, forgery or fraud, fund diversion, or misuse of loan funds. The declaration will be mandatory before sanctioning any loan or investment under the scheme.
The circular also gives priority to borrowers applying through the scheduled bank from which they originally obtained project loans, aiming to facilitate the assessment process and accelerate financing for the revival of closed enterprises.
To ensure proper utilisation of funds and strengthen financial monitoring, all disbursements, project-related expenditures and revenue transactions under the scheme must be conducted through dedicated escrow or revenue accounts. Banks will also have to comply with the instructions issued under BRPD Circular No. 01, dated January 18, 2024, concerning the opening and operation of project income accounts.
The revised directive further requires participating banks to submit refinancing applications using the prescribed format, Annexure-Ka, along with relevant documents, including credit appraisal reports, board approval and borrower declarations.
Bangladesh Bank has also amended the existing participation agreements with scheduled banks to bring them in line with the revised re-financing mechanism. Accordingly, references to the pre-finance scheme in earlier circulars, operational guidelines and related agreements will be replaced by the re-finance scheme. The amendments will apply to the existing regulatory framework introduced through BRPD Circular No. 13, dated June 4, 2026, BRPD-3 Circular Letter No. 01, dated July 7, 2026, and BRPD Circular Letter No. 32, dated September 17, 2026.
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