Written by The Banking Post
Bangladesh Bank has eased regulations on external borrowing by fully foreign-owned industrial enterprises, allowing them to access loans from parent companies, associates, and shareholders abroad under a general authorization framework to facilitate easier access to finance.
Under a circular issued on July 15, 2026, eligible manufacturing and service-sector enterprises operating both within and outside specialized zones, including EPZs, EZs and High-Tech Parks, will be able to obtain short-, medium- and long-term foreign loans subject to specified conditions.
For short-term borrowings of less than one year, companies outside specialized zones may obtain interest-free loans for working capital purposes without prior approval from Bangladesh Bank. They may also avail cost-bearing loans at an all-in-cost of up to 3 percent per annum for bona fide business purposes, including input procurement. Such loans must be repaid in a bullet payment at maturity and may be rolled over for a maximum aggregate tenor of three years.
For medium-term borrowings of one to five years, Bangladesh Bank has allowed interest-free loans of up to USD 50 million and cost-bearing loans of up to USD 5 million for capital expenditure, including the purchase of machinery, equipment and construction. Long-term borrowings of more than five years will also be allowed, with borrowing costs capped at 3 percent per annum where applicable.
The circular also allows outstanding borrowings to be converted into equity subject to existing regulations.
As per industry insiders, the new measures are expected to improve access to affordable overseas financing and encourage greater foreign investment in Bangladesh.
