Bangladesh Economic Zones Authority (BEZA) has sought rationalisation of the interest rate on loans it took out from a state-owned non-banking financial institution between 2015 and 2018.
In a letter sent to the lender -- the Bangladesh Infrastructure Finance Fund Limited (BIFFL) -- recently, the BEZA requested it to make the interest rate rational in line with the present rates set by the central bank for the banks.
The BEZA borrowed Tk 5.37 billion from the BIFFL for acquisition and development of lands for different economic zones.
But it has now become difficult to repay the loan instalments with the funds received as lease money from the investors of economic zones, according to the letter.
A huge amount of fund is being spent to acquire, develop and improve different infrastructure at the economic zones, but the source of income of the authority is limited, the letter explained.
It said the average rate of interest was 12 per cent or more in the country when the BEZA took the loans from the state-run financial institution. In view of the interest-rate regime at the time, the BIFFL provided loans to BEZA at 6-9 per cent interest rates.
The authority is regularly repaying its loans with interest to the financial entity, the BEZA said in its letter.
Currently, the scheduled banks are providing loans at a maximum 9.0 per cent interest rate, set by the central bank, which came into effect on April 01, 2020.
But the state-owned financial institution has yet to take any initiative to make rational the rate of interest on loans, reads the letter.
BEZA believes that the BFFIL should take a move to make the interest rate on loans it received logically consistent with the interest rates set by the central bank, the letter said.
BEZA, officially instituted by the government on November 9 in 2010, has till now got approval to establish 88 economic zones countrywide -- 59 government and 29 private zones.
It aims to set up economic zones in all potential areas, including backward and underdeveloped regions, with a view to encouraging rapid economic development through increased and diversification of industry, employment, production and exports.