Bangladesh Bank relaxes loan regulations to draw in foreign investors

Bangladesh Bank Eases Borrowing Rules for Foreign-Owned Firms

Bangladesh Bank has revised its foreign exchange policy to make it easier for foreign-owned or foreign-controlled companies to access local currency loans.

In a circular issued Wednesday, the central bank announced that the maximum permissible debt-equity ratio for such firms has been raised from 50:50 to 60:40. This change is intended to support borrowing in Taka for capacity expansion or BMRE (Balancing, Modernisation, Rehabilitation, and Expansion) projects.

The revised rules apply to manufacturing or service-oriented foreign firms that have been operating in Bangladesh for at least three years.

These companies can now obtain term loans from the domestic market regardless of the proportion of local equity in their capital, provided they adhere to standard credit norms and prudential guidelines, including the single borrower exposure limit.

“All other instructions in this regard shall remain unchanged,” the circular stated, signed by Monoar Uddin Ahmed, Director of the Foreign Exchange Policy Department.

The policy shift is part of Bangladesh’s broader strategy to enhance its appeal to foreign investors by offering more flexible financing options.