BB eases foreign borrowing rules for BIDA-registered firms

Bangladesh Bank (BB) has eased rules on medium- and long-term external borrowing by industrial enterprises operating in specialised zones, exempting firms registered with the Bangladesh Investment Development Authority (BIDA) from the central bank's approval requirement.

The clarification means industrial enterprises registered with the Invest Bangladesh Authority, formerly known as BIDA, will no longer need to obtain separate approval from Bangladesh Bank to take medium- and long-term external loans.

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The central bank issued a circular in this regard today.

It said the requirement for Bangladesh Bank approval will apply only to industrial enterprises in specialised zones that are not registered with the Invest Bangladesh Authority.

"Medium- and long-term external borrowing by industrial enterprises of specialised zones, other than those registered with the Invest Bangladesh Authority, is subject to approval from Bangladesh Bank," the circular said.

The move is expected to simplify the process for eligible industrial enterprises seeking foreign financing, as BIDA-registered firms will continue to have their loan proposals considered through the existing scrutiny mechanism of the investment authority.

The central bank also clarified that loan proposals of companies formerly registered as Economic Zone companies will have to be submitted to the Scrutiny Committee on Foreign Loan/Supplier's Credit of the Invest Bangladesh Authority for consideration.

The committee will examine such proposals instead of the companies having to seek approval directly from Bangladesh Bank under the provision clarified in the latest circular.

Other rules and regulations will remain unchanged.