The declining trend of imports and the overall nervous outlook are to blame for the subdued demand for loans from the OBUs, an arm of banks that give out loans in foreign currency, said Emranul Huq, managing director of Dhaka Bank. Individuals or institutions can take short-term foreign currency loans from the OBUs at the interest rate of LIBOR plus 3.5 per cent, which is much lower than the taka-denominated loans. Low investment and declining trend of import growth amid the ongoing pandemic are the main reasons behind the lacklustre demand for foreign currency loans, saidTareqRefatullah Khan, a deputy managing director at BRAC Bank, one of the pioneers in OBUs. The BB also eased rules on taking foreign currency loans from OBUs by the bank's own subsidiaries not resident in Bangladesh. The central bank on May 27 last year revised its policy to allow local industrial enterprises to take foreign currency loans from OBUs.

Source: Dhaka Tribune December 09, 2020 18:22 UTC