The Bangladesh Bank yesterday relaxed rules for availing pre-shipment credit refinance aiming at helping local exporters continue shipping products amid the coronavirus outbreak.

Previously exporting companies were eligible for the refinancing if they brought the overdue bill to Bangladesh within the four-month timeframe set by the central bank's Guidelines for Foreign Exchange Transactions.

Now the timeline has been extended to two years, according to a new guideline from the BB yesterday. 

That means exporters seeking the refinancing facility will get an additional 20 months to bring in their export bills from foreign countries.

On April 5, Prime Minister Sheikh Hasina announced that the Bangladesh Bank will introduce a new loan facility titled pre-shipment credit refinance scheme involving Tk 5,000 crore for local exporters.

The revolving fund will have a tenure of three years, the guideline said.

Banks will borrow money from the fund at 3 per cent interest rate and can charge borrowers a maximum 6 per cent.

A maximum of 10 per cent of the commercial invoice value of exported consignment will be eligible for the scheme.

A single client may use the facility multiple times but they have to be availed in a single year. 

Recently, the Bangladesh Bank has widened its export development fund from $3.5 billion to $5 billion. Banks will have to disburse the lion's share of the stimulus package from their own sources.

It also introduced international factoring, a development that can be viewed as a mode of accelerating the country's exports and reduce exporters' risk of collecting their products' worth.

This new method is a form of payment guarantee for exporters, according to a central bank notice.

Banks dedicatedly running foreign exchange related businesses will be allowed to let exporters ship goods on sales contracts under open account credit terms within the statutory period, if otherwise not extended, from the date of shipment.