Govt guarantees Tk 1.0b loan for Ansar-VDP Bank

Dhaka,  Wed,  23 August 2017
Published : 17 Apr 2017, 22:05:02 | Updated : 17 Apr 2017, 22:10:45

Govt guarantees Tk 1.0b loan for Ansar-VDP Bank

FE Report

The government has issued a state guarantee against a refinancing loan worth Tk 1.0 billion in favour of Ansar-VDP Unnayan Bank, officials said.

Earlier, the Bangladesh Bank (BB) sanctioned the loan to the state-owned specialised bank.

The government's guarantee will expire on December 31, 2022. The government will be responsible for paying back it to the BB if Ansar-VDP Bank fails to make payment, according to the finance ministry document.

The loan will be disbursed to low and middle-income members of Ansar and VDP (Village Defence Party), said an official concerned of the state-owned bank.

"There is no need to get refinancing from the BB as Ansar-VDP Bank is now facing cash crunch. The central bank will provide funds to the bank under the refinancing scheme if the bank seeks the same amount after disbursement," General Manager of Ansar-VDP Unnayan Bank Tapan Kumar Saha told the FE.

"We have sought soft loan as we lack funds. Besides, some Tk 250 million has been sought as paid-up capital that is government's portion," he said.

All banks and non-bank financial institutions (NBFIs) are eligible for getting the funds from the central bank at 5 per cent interest while banks and non-banks would charge their clients reasonable interest rates.

The state-owned specialised bank has recently sought a loan guarantee against $100 million foreign loan from the finance ministry, but the ministry rejected its proposal on different grounds.

Currently, the authorised capital of the bank is Tk 1.07 billion and there are 219 branches and 18 regional offices in the country.

The main objectives of this bank are to alleviate poverty of marginal Ansar-VDP members in particular, women empowerment and economic well-being by providing banking services to a large number of Ansar-VDP members.

The bank started operation in late 1996 aiming at poverty alleviation of nearly 5.6 million Ansar and VDP members through self-reliance.
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