$50m loan package to rescue fire-ravaged Standard GroupStaff Correspondent
Bangladesh Bank and five commercial banks on Sunday agreed to give a rescue package including $50-million loans in easy terms for restoring the business activities of the fire-ravaged Standard Group.
Besides, the BB also relaxed the regulations of the loan rescheduling, export retention quota and opening tenure of the letters of credit for the industrial raw materials and the capital machineries against the group.
Of the $50-million (around Tk 400 crore) loan facility, Standard Group will receive $25 million from the BB’s export development fund with a lower rate of interest and remaining fund will come from the three foreign commercial banks.
The decisions came from a meeting presided over by BB governor Atiur Rahman at the central bank headquarters in the capital while Standard Group managing director Mosharraf Hussain, BGMEA chairman Md Atiqul Islam and senior officials of the five commercial banks, which are operating business with the group, attended.
The five banks are: Prime Bank, Shahjalal Islami Bank, Standard Chartered Bank, Hongkong and Shanghai Banking Corporation and Citibank NA.
BB deputy governor SK Sur Chowdhury after the meeting told reporters that Standard Group had applied the central bank for fresh $25-million loans from the BB’s export development fund.
The group will be able to receive the EDF loan amounting to $25 million with LIBOR (London inter-bank rate) +1.5 per cent instead of the existing LIBOR+2.5 per cent, he said.
The scheduled banks usually receive the EDF loan with LIBOR+1 per cent from the central bank and they impose more 1.5 per cent rate of interest when they disburse the loan to their clients, Sur said.
The BB and the banks will waive 1 per cent interest rate for Standard Group so that it could import products to revamp its business activities, he said.
Standard Group had earlier taken $31.84 million loan from the EDF.
The tenure of EDF loan is six months but the banks will be able to renew the loan for Standard Group.
According to a BB news release, three FCBs will provide Standard Group with more loans amounting to $25 million. The banks are: Standard Chartered Bank, HSBC and Citibank NA.
Sur said that the banks concerned would be able to reschedule the Standard Group loan without taking any down payment.
The banks will be able to set one year grace period and five-year term to recover the loans from the group, he said.
The rate of interest against the rescheduled loan of Standard Group could not be crossed the cost of funds of the banks, he said.
The BB will consider the excess tenure of the opening of LCs for capital machinery and the industrial raw materials against the group on the case-to-case basis, BB deputy governor said.
The companies under Standard Group will use their export retention quota for other fire-ravaged loser companies, if required, he said.
The companies under the group will also make import payment from their repatriate export proceeds to another companies, if required, Sur said.
As per the BB rules, a company will make import payment from its repatriate export proceeds, but it could not do so for other companies without the BB permission even though they are all under a same group.
Standard Group will be able to convert its local currency loan with the FCBs to term loan with foreign currency, if it applies, he said.
He, however, said the group would have to receive approval from the board of investment to convert the loan into foreign currency.
The BB will also extend cooperation in this regard, he said.
According to Standard Group, it incurred a financial loss of Tk 1,200 crore due to the devastating fire that gutted garment products and machinery of its two buildings at Konabari in the Gazipur industrial belt near the capital Dhaka on November 29. Miscreants allegedly set the fire.
Earlier on December 1, leaders of the country’s apparel trade promotion bodies urged the government and other stakeholders, including banks and insurance companies, for help in rebuilding the units, where around 18,000 workers are employed.
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