BB Lifts Loan Cap for Coal-Based Power Plants

The Bangladesh Bank (BB) has withdrawn the loan limit for coal-based power plants to ensure uninterrupted financing for power generation.

In a notice on Tuesday (8 November), the central bank's Banking Regulation and Policy Department directed all scheduled banks to take steps in this regard. 

With the relaxation, coal-based power plants will be able to borrow from banks as much as they may need over the next five years.

In a separate notice signed by Bangladesh Bank Deputy Governor Abu Farah Md Nasser, it has been said that under the authority stated in section 121 of the Bank Companies Act, a single person, institution or group of power producers will get special benefits in taking loans from banks for setting up coal-based power plants and purchasing or importing other raw materials including coal used for power generation.

The Bangladesh Bank will decide the loan cap from the previous 25% for the next five years, the notice added.

According to the Section 26 (kha) of the Bank Company Act 1991, an individual, institution or group was not allowed loans more than 25% of the capital of a bank._Agencies