Overall activities of EDF to be automated
The central bank is set to make the overall activities of its export development fund (EDF) online shortly to facilitate the country's exporters for boosting their business activities, officials said.
Forex Reserve and Treasury Management Department of the Bangladesh Bank (BB) has already installed software to provide services like receiving application and sending payment advice promptly to the exporters through their banks concerned.
The central bank has taken the latest initiative following discussion on awareness building about the EDF with representatives of the country's leading trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA) recently.
"We're working to introduce automated system instead of the existing manual one to provide such refinancing fund to the exporters smoothly," a BB senior official told the FE Wednesday.
He also said the central bank has already discussed with the exporters how to become popular the fund.
"We want to provide the short-term liquidity support to small exporters along with the larger ones," the central bank official explained.
Earlier on May 27 last, the BB increased the allocation for the EDF by more than 33.33 per cent to US$ 2.0 billion from $ 1.5 billion earlier to meet the growing demand of the country's exporters.
Currently, the exporters are allowed to get such foreign currency loan with paying at the London Inter-bank Offered Rate (LIBOR) plus 2.50 per cent interest.
Under the existing provisions, the EDF financing is allowed for input procurements against back-to-back import letters of credit (LCs) or inland back-to-back LCs in foreign exchange, by manufactures producing final output for direct export and also by producers of local deliveries to manufacturers of the final export.
The EDF loans from the central bank are payable by the banks upon receipt of exports proceeds within 180 days from the date of disbursement, extendable by the BB up to 270 days in case of a longer period for repatriation of export proceeds.