The Bangladesh Bank has officially introduced a refinancing framework valued at Tk 30,000 million to implement the “Export Diversification Refinancing Scheme”. The primary objectives of this macro-financial intervention are to systematically widen the operational foundation of the country’s export sectors beyond the Ready-Made Garments (RMG) industry and to fortify the domestic manufacturing capabilities of non-traditional economic fields. The Sustainable Finance Department of the central bank issued a formal regulatory circular to this effect on Sunday, 7 June 2026.
According to the official central bank directive, the scheme has been designed to counter product-centric and market-geographic economic vulnerabilities that stem from an over-reliance on RMG revenues. Furthermore, the state strategy aims to foster rapid development and structural growth across various alternative export industries that demonstrate high global growth potential.
Credit Framework and Refinancing Guidelines
The monetary authorities have outlined the precise structural mechanisms and regulatory guidelines governing the newly established fund. The total financial capital allocated for this refinancing facility will be sourced directly from the surplus liquidity pools maintained by scheduled commercial banks operating within the jurisdiction of Bangladesh. The central bank will manage this resource pool continuously as a revolving financial fund.
The operational guidelines dictate specific interest rates and temporal conditions for all Participating Financial Institutions (PFIs) and end-borrowers:
Central Bank Refinancing Rate: The Bangladesh Bank will extend the credit facility to verified PFIs at a fixed interest rate of 4% per annum.
End-User Maximum Rate: Eligible exporters and industrial manufacturers will secure financing from the PFIs at an interest rate capped at a maximum of 7% per annum.
Interest Calculation Method: The applicable interest on all credit disbursed under the umbrella of this fund must be computed utilizing a strict reducing balance methodology.
Tenure and Repayment Holidays: The maximum duration for individual credit allocations under this scheme is fixed at three years, which includes an integrated maximum grace period of six months.
Through this structural mechanism, the central bank aims to improve the international competitive edge of domestic commodities, maximize sovereign foreign exchange inflows, rebalance the national trade accounts, and generate sustainable industrial employment through the expansion of non-traditional sectors.
Targeted Industries and Strict Eligibility Protocols
The allocation of credit under this refinancing project is closely aligned with the statutory goals of the national Export Policy 2024–27. Financial assistance will be granted exclusively to industrial enterprises classified within the “Highest Priority” and “Special Development” sectors under the active state policy guidelines.
Local manufacturers who integrate a substantial volume of domestic raw materials into their manufacturing pipelines will receive processing priority from the central bank. Specifically, the jute and leather industries have been explicitly emphasized by state planners as essential strategic targets for this export diversification drive.
To ensure strict financial discipline and safeguard the public exchequer from credit risks, the central bank has instituted definitive exclusionary protocols. The following categories of commercial entities are legally barred from accessing any credit facilities under this initiative:
Any exporter or manufacturing enterprise flagged as an active loan defaulter within the official records compiled by the Credit Information Bureau (CIB).
Any corporate entity, group, or trading enterprise that has failed to repatriate legitimate foreign export earnings within the statutory legal timeline.
Any commercial establishment or manufacturing firm with a recorded corporate history of debt write-offs.
Administrative Requirements and Sharia Alignment
Commercial banks and non-bank financial institutions seeking to disburse credit under this national facility must formally execute a Participation Agreement with the Sustainable Finance Department of the Bangladesh Bank. The regulatory authority has also integrated Islamic banking windows into the system, permitting Sharia-compliant financial institutions to deploy capital using verified Islamic investment modalities. However, these specialized operations must strictly conform to the standardized interest equivalents, maximum profit margins, and repayment timelines mandated in the general guidelines.
To successfully claim the refinancing facility from the central bank, PFIs are required to submit formal applications alongside all verified legal and financial documentation within exactly 90 days from the initial date of credit disbursement to the exporter. The mandatory administrative submission package comprises a formally executed Demand Promissory Note, a valid Letter of Continuity, an authorized Debit Authority Letter, and an updated, clear CIB report for the borrowing entity. Furthermore, all investment operations executed under this refinancing scheme must maintain a strict minimum debt-to-equity ratio of 70:30.
Centralised Oversight, Penalties, and Legal Enactment
The Bangladesh Bank has established a rigorous framework for continuous monitoring and financial accountability to prevent the unauthorized diversion of capital. Participating Financial Institutions are legally mandated to submit comprehensive quarterly compliance and credit disbursement reports within 15 days of the termination of each fiscal quarter. Additionally, the central bank will deploy dedicated on-site inspection teams to execute regular, unannounced audits to verify the appropriate end-use of all distributed public funds.
The regulatory circular outlines severe financial penalties for non-compliance, misreporting, or fund diversion. If an institution or a borrower is found to have provided fraudulent data or misapplied the capital for non-intended commercial purposes, the central bank will impose a punitive interest penalty of an additional 5% per annum over the standard refinancing rate. This penalty will be directly debited from the clearing current account maintained by the offending financial institution with the Bangladesh Bank.
In the event that a borrowing exporter defaults on their repayment schedule, the financing PFI is legally obligated to immediately notify the central bank. Upon receipt of such notification, the Bangladesh Bank retains the statutory right to recover the entire outstanding refinancing amount through a one-off automated deduction from the current account of the concerned financial institution.
The Export Diversification Refinancing Scheme has been enacted under the statutory powers conferred upon the central bank by Section 45 of the Bank Company Act 1991 (amended up to 2023). The regulatory directives contained within the official circular have been declared effective immediately across all territories of Bangladesh.