Incentive loans provided to assist entrepreneurs affected by Corona must be used in the right sector. It cannot be abused or used in different sectors. The issue needs to be strictly monitored by the banks. Such instructions have been given to commercial banks by Bangladesh Bank.
Bangladesh Bank has received allegations that incentive money is being misused. Such incidents have come up under the special supervision of the central bank. Some of these entrepreneurs have taken incentive money and used it in unproductive sectors instead of using it as working capital of the industry. Some have broken the rules and repaid previous loans. Again some have bought cars or land. There are also examples of investing some money in the stock market. The central bank has also received information that it has used incentive loans for one sector in other sectors. It has been alleged that incentive loans have also been given in the name of a closed industry. These issues are being investigated by the central bank.
The government announced 10 loan-based incentive packages to provide working capital to the victims in Corona. The amount of money in these is 1 lakh 24 thousand crore rupees. Of this, there is an incentive package of Tk 40,000 crore to provide working capital to large industrial and service sectors and an incentive package of Tk 20,000 crore to provide working capital to cottage, small and medium sectors. In addition, there is a 5.5 trillion fund to lend under the back-to-back LCs for the import of raw materials for the export industry. Its interest rate is 2.5 percent. The other two have an interest rate of 9 percent. Entrepreneurs will pay 4 and a half percent of the interest of the first, the government will pay the remaining 4 and a half percent. The entrepreneur of the second will give 4 percent and the government will give 5 percent. Basically, there have been irregularities with the loans of these three funds. However, the number of irregularities is very low. At the time of the announcement of the incentive, the Central Bank had said in a circular,No previous loan can be repaid with this loan. You have to use the loan in the sector for which you will take it. But in violation of this directive, some entrepreneurs have repaid the previous high-interest loans with this low-interest loan. That information has come to the central bank.
The circular further stipulated that the incentive loan should be used as working capital of the respective industry. In no way can it be used in any other sector or unproductive sector. Land has been bought with loan money in violation of this instruction. The central bank has completely banned the purchase of land with a loan from a bank. In this regard, a circular has been issued long ago prohibiting the distribution of loans for land purchase. Some have even bought cars with low interest loans in violation of incentives. However, if you take a loan to buy a car, you have to pay an average of 13 to 14 percent interest including service charge and security guarantee. Although the interest rate on the original loan is 9 percent. Incentive loans do not have the opportunity to invest in the stock market. But these money have been invested in the secondary market in violation of the conditions. This has increased the liquidity flow in the market. As a result, the share price has risen artificially.
Export loans were supposed to bring in industrial raw materials, but they did not materialize. Some have taken the opportunity to repeatedly raise from the central bank when bringing goods on the pretext of the corona. It is suspected that the money was smuggled abroad without bringing the raw materials to the country. This issue is also being investigated. In previous circulars, Bangladesh Bank had directed the commercial banks to set up a special monitoring cell headed by the MD to ensure that incentive loans were used properly. Cells have also been formed. But they could not ensure proper use of the loan.
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