Bangladesh Bank has approved the formation of a fund of Tk 500 crore called 'Start-up Fund' to provide loans to new entrepreneurs. From there, small entrepreneurs will get unsecured loans at low interest rates.
The board of directors of Bangladesh Bank on Thursday (March 11) approved the formation of a 'start-up fund', said a spokesman for the central bank. Sirajul Islam.
Relevant officials of the central bank said that a refinancing fund of Tk 500 crore called 'Start-up Fund' will be set up from Bangladesh Bank's own sources. In addition, all other commercial banks together will form a fund of another Tk 500 crore.
A refinancing fund of Taka 500 crore will be set up for start-up funds from Bangladesh Bank's own sources. The term of this revolving fund will be five years. If necessary, the size of the fund may be further increased in the future.
Besides, commercial banks will jointly form another fund of Tk 500 crore. They will set up their own start-up fund by transferring one percent of their annual net profit.
At the customer level, the interest rate of this fund will be up to a maximum of 4 percent and commercial banks will get loan from Bangladesh Bank to this fund at zero point 50 percent interest rate.
The customer will get a loan of one crore taka without any collateral from this fund. The start-up will receive personal guarantee from the entrepreneurs by the concerned bank. However, in case of entrepreneurs with degree, the original certificate of educational qualification, the original certificate of technical training should be deposited in the concerned bank as security.
People's Bank has also been given three months to propose a preliminary consent letter (LOI or Letter of Intent) for a final license at its board meeting on Thursday (March 11). The proposed People's Bank wants three months to meet the conditions of the LOI. The central bank has given time in the context of the application. If they fail to meet the conditions within this period, their LOI will be canceled as per the rules.
According to the terms of the initial letter of intent (LOI or Letter of Intent) for a license, a bank now has to keep a capital of Rs 400 crore of the displayed income in order to get a final license. Their LOI or Letter of Intent will be canceled if they fail to deposit the capital of Rs 400 crore of the displayed income within three months.