DHAKA, July 15, 2026 (BSS) - Bangladesh Bank (BB) has allowed fully foreign-owned industrial enterprises to borrow from their parent companies, associates and shareholders under a general permission, aiming to improve access to external financing for manufacturing and service-oriented firms.

The Foreign Exchange Investment Department (FEID) issued a circular today allowing eligible foreign-owned industrial enterprises, except trading businesses, to obtain external loans without prior approval from the central bank, subject to specified conditions.

Under the new guidelines, firms can receive interest-free short-term loans with a maturity of less than one year for working capital purposes. 

They may also avail cost-bearing short-term loans in convertible foreign currencies at an all-in-cost of up to 3.0 percent per annum. 

Such loans will be repayable on a bullet basis at maturity and may be rolled over for a maximum aggregate tenor of three years.

For medium-term (one to five years) and long-term (above five years) borrowings, the funds must be used for capital expenditure, including procurement of machinery, civil construction and legitimate services.

The circular sets the ceiling for cost-free medium-term borrowing at US$50 million, while cost-bearing medium-term loans are capped at US$5 million. 

The interest rate on both medium- and long-term cost-bearing loans cannot exceed 3.0 percent per annum.

Bullet repayment will be allowed for medium-term loans of up to US$5 million, but such repayment will not be permitted for long-term borrowings.

Bangladesh Bank also said the debt-to-equity ratio for cost-bearing external borrowings must not exceed 80:20, while no such ratio will apply to cost-free loans. Repayment in any single installment cannot exceed US$5 million.

The circular instructed Authorized Dealers (ADs) to credit loan proceeds to dedicated foreign currency accounts, ensure the funds are used only for approved purposes, conduct due diligence in line with anti-money laundering and counter-terrorism financing (AML/CFT) requirements, and report all transactions to the central bank.

It also said outstanding external borrowings, including accrued costs, may be converted into equity at any time in accordance with the applicable procedures.

The circular, signed by Bangladesh Bank Director Mahmudun Nabi, came into immediate effect.