Published: 12:12 AM, 24 May 2026
Central Bank Announces Massive Funds to Revive Private Sector Growth
Bangladesh Bank Governor Mostaqur Rahman unveiled a stimulus package for private business enterprises while addressing a press conference in the capital on Saturday. -AA
Bangladesh Bank (BB) on Saturday announced a massive refinancing and support funds involving Tk 600 billion to revive the slowing economy through vibrating businesses in the private sector-led economy. As part of the broader objective, Bangladesh Bank, the country's central bank, has come up with the stimulus package to resume productions in the closed or struggling industrial units, boost agricultural output and exports, strengthen rural economic activities and create employment opportunities for over 2.50 million people.
The package has two components: a Tk 410 billion refinancing fund, sourced from banks with excess liquidity through long-term deposits of at least three years at a 10 percent interest rate, and a Tk 190 billion fund drawn from BB's own resources, subject to a government guarantee. The BB governor Md Mostaqur Rahman unveiled the stimulus package at the press conference at the BB headquarters where deputy governors and other senior central bankers were present. Of the refinancing allocation, Tk 200 billion has been earmarked for closed industrial and service-sector enterprises, Tk 50 billion for cottage, micro, small and medium enterprises (CMSMEs) while Tk 100 billion for agriculture and rural economic activities.
Another Tk 30 billion has been allocated for export diversification, while a similar amount will be used to develop the northern region as an agricultural hub. The support package that comes from BB's own fund includes Tk 50 billion for pre-shipment credit refinance, Tk 50 billion for cottage, micro and small entrepreneurs, and Tk 20 billion each for leather and leather goods, and frozen fish and fish exports. Besides, Tk 10 billion has been allocated separately for unemployed youth employment, rural economic activities, green investment and overseas employment. The central bank has also set aside Tk 5.0 billion each for startups and the creative economy. Presenting
the stimulus package, the BB Governor Md. Mostaqur Rahman said the country's economic growth had weakened steadily over the past three years amid mounting stress in the banking and industrial sectors. He said GDP growth, which earlier stood at 5.8 per cent in FY'23, later declined to 4.2 per cent in FY'24 and is now projected to fall further to around 3.7 per cent in FY'25. He noted that key sectors including readymade garments, textiles, steel, ceramics, information technology and manufacturing have faced significant setbacks due to persistent economic pressures.
Mostaqur Rahman also referred to rising non-performing loans, incidents of money laundering and weakening depositor confidence, saying higher lending rates have discouraged small and medium entrepreneurs from expanding businesses. "To address the current challenges and restore economic momentum, the central bank has introduced a special support package," he said. The governor said that at the customer level, the interest rate on loans for large industries will be 7.0 per cent while rates for smaller borrowers may be slightly higher. The governor said the allocation for the creative economy would be provided as grants from corporate social responsibility (CSR) funds instead of loans. About the cost of the fund, a BB official on condition of not disclosing his identity said the central bank will source execs liquidity of the banks at 10.0 per cent. Of the costing, the government will bear 6.0 per cent as subsidy while the BB will give the remaining 4.0 per cent. In terms of disbursement, the central banker said the commercial banks will get the fund at 4.0 percent and will be allowed to lend at 7.0 per cent to the borrowers. "That's the interest rate mechanism in this stimulus package," he said.
The banking regulator expects the package, once fully implemented, to help reopen closed factories, boost agricultural output and exports, strengthen rural economic activities and create employment opportunities for over 2.5 million people. Managing Director and Chief Executive Officer of Mutual Trust Bank (MTB) PLC, Syed Mahbubur Rahman, said the central bank's intention to revive the economy is good, but there are risks involved from the banking perspective. He explained that MTB may consider giving funds, subject to feasibility, to its struggling industrial borrowers who are suffering from various factors. "But we cannot give funds to the struggling borrowers of other banks. It's risky because we know nothing about them," he cautioned. The experienced banker stressed that interest rate is not the only issue behind industries' struggles.
Other challenges such as energy, power, and lack of adequate physical infrastructure play a significant role. "So, only giving low-cost credits will not solve the problem," he noted. Syed Mahbubur Rahman further pointed out that commercial banks have already extended policy support to struggling borrowers under Bangladesh Bank's regulatory guidance. "How many returned to business, which needs to be studied properly before going for such a package," he said. He added that banks need to wait for the relevant circulars to be uploaded in order to analyze them properly and better understand the situation. "Let's see," he remarked. Importantly, Mostaqur Rahman emphasized that there are many other issues that must be considered before giving funds - such as the condition of machinery, availability of energy, and overall operational viability of the industries.
