South Asia

Sum of Measures 1—5 (Total Package)

Total Package in USD Million: 13,785.70
% of GDP (2019): 4.27%
% of Regional Total Package: 3.22%
Package Per Capita in USD: 84.55
Note: Measures 9 and 10 are added to the sum of Measures 1-5.
Measure Amount (Local) Amount (USD) Details Update Source
01 - Liquidity Support info_outline BDT380,000,000,000 USD4,473,219,541
01A - Short-term lending info_outline BDT380,000,000,000 USD4,473,219,541

(i) Bangladesh Bank (BB) has created several refinancing schemes, including a BDT50 billion Pre-shipment Refinancing scheme to support exporters, a BDT50 billion Special Incentive Refinancing Scheme for the agriculture sector, a BDT30 billion Refinancing Scheme to support micro-finance, and a BDT250 billion refinance scheme to facilitate the implementation of the government stimulus packages.; (ii) No amount/estimate: Banks and financial institutions can borrow 360 days against additional treasury bills and bonds of statutory deposit rate (SLR) with Bangladesh Bank. The remaining amount of the face value will be paid as repo by applying margin of 15% and 5% face value of treasury bills and bonds respectively.

01B - Support policies for short-term lending info_outline

(i) No amount/estimate: The CRR was initially reduced from 5% to 4.5% (daily-basis) and from 5.5% to 5% (bi-weekly basis), with a further reduction to 3.5% and 4%, respectively, from 15 April 2020; For non-bank financial institutions, CRR has been reduced to 1.5% (bi-weekly basis) and 1% (daily basis) effective from June 1, 2020. (ii) No amount/estimate: 19 June 2020, central bank lowered cash reserve ratio by 200 bp to 2.0% for offshore banking operation.

01C - Forex operations info_outline

No amount/estimate: Foreign exchange rules were eased by Bangladesh Bank to provide foreign currency to the Bangladeshi nationals who are visiting abroad and facing problem in returning home due to travel disruptions. It also resumed sales of the US dollar to offset extra pressure on the market caused by lower remittance inflows following the COVID-19 outbreak.

02 - Credit creation info_outline BDT370,000,000,000 USD4,355,503,237
02A - Financial sector lending/funding info_outline BDT350,000,000,000 USD4,120,070,630

(i) The Ministry of Finance will subsidize interest payments on up to BDT500 billion in working capital loans by scheduled banks to businesses. Half of this amount (BDT 250 billion) will be refinanced by Bangladesh Bank and is included in Item 1 above. Remaining BDT250 billion will be financed by commercial banks from their own funds. (ii) 29 October 2020, increased to BDT400 billion from BDT300 billion, working capital facilities to affected industries and service sector. This is part of the BDT500 billion amount in measure i.

02B - Support policies for long-term lending info_outline
02B1 - Interest rate reductions

No amount/estimate: (i) The repo rate has been lowered from 6 percent to 5.75% (effective 24 March 2020) and will be further reduced to 5.25% effective 12 April 2020. (vii) No amount/estimate: 29 July 2020, Bangladesh Bank in its monetary policy statement announced: (a) Overnight repo rate from 5.25% to 4.75%, (b) reverse repo rate from 4.75% to 4.00%, (c) Bank Rate which remained unchanged for the last 17 years (since 2003) to be reduced from 5.00% to 4.00%; (ix) September 24, Bangladesh bank fixed the highest interest rate on credit card loans to 20%.

02B2 - Other policies to support long-term lending

(i) The Bangladesh Bank (BB) has also raised the advance-deposit ratio (ADR) and investment-deposit ratio (IDR) by 2% to facilitate credit to the private sector and improve liquidity in the banking system; (iii) BB took measures to delay non-performing loan classification; (iv) Banks with capital adequacy ratio (CAR) (in relation to their risk-weighted assets (RWA)) of 12.50% or above will be permitted to declare up to 30% dividend (of which cash dividend may be up to 15%); banks with CAR between 11.25% and 12.50% may declare dividend up to 15% (of which maximum cash dividend may be 7.5%); banks with CAR below 11.25% may declare dividend up to 10% (of which maximum cash dividend may be 5%). Cash dividend can be distributed before 30 September 2020 in favor of individual (local and foreign) investors; (v) 15 June 2020, loan defaulters given until September to repay loans before they are considered default; (vi) Banks may, without repayment guarantee, advance credit up to USD 500k for import of coronavirus related life-saving drugs, medical kits/equipment and other essential medical items.

02C - Loan guarantees BDT20,000,000,000 USD235,432,607

27 July 2020, BDT20 billion credit guarantee scheme for cottage, micro and small industries.

03 - Direct long-term lending info_outline BDT50,000,000,000 USD588,581,519
03A - Long-term lending info_outline BDT50,000,000,000 USD588,581,519

BDT50 billion for Special Fund for Salary support to export oriented manufacturing industry workers.

03B - Forbearance

BB took measures to waive credit card fees and interests, suspend loan interest payments.

04 - Equity support info_outline
05 - Health and income support BDT371,095,000,000 USD4,368,393,172
05A - Health support BDT8,500,000,000 USD100,058,858

(i) BDT1 billion Special Honorarium for doctors, nurses, medical workers; (ii) BDT7.5 billion compensation in case infection/death; (iii) No amount/estimate: November 5, signs MOU with Beximco Pharma for the supply and distribution of 30 million doses of AstraZeneca vaccine.

05B - Income support BDT362,595,000,000 USD4,268,334,314
05B1 - Tax and contribution deferrals and policy changes
05B2 - Tax and contribution rates reduction
05B3 - Wage support and subsidies to individuals and households BDT78,170,000,000 USD920,188,346

(i) BDT12.58 billion Cash Transfer to targeted poor people; (ii)BDT8.15 billion expansion of cash allowance programs; (iii) BDT25.03 billion free food distribution; (iv) BDT2.51 billion OMS of rice at 10 taka/kg; (v) BDT21.3 billion construction of home for homeless people; (vii) BDT8.6 billion additional procurement of paddy/rice (2.0 lac ton); (vi) No amount/estimate: Expatriate Bangladeshis can get 2% incentives without showing any paper on remittance upto $5,000 (earlier $1,500) and for more than $5,000.

05B4 - Subsidies to business BDT189,425,000,000 USD2,229,841,083

(i) BTD20 billion, the Ministry of Finance will subsidize interest payments as mentioned in Measure 2 on working capital loans by scheduled banks to businesses; (ii) BDT2.0 billion Support for farm mechanization; (iii) BDT20 billion employment creation through four State owned entities; (iv) Export Development Fund has been increased by USD1.5 billion; (v) BDT20 billion subsidy for commercial bank's suspended interest of April-May, 2020;

05B5 - Indirect income support
05B6 - No breakdown (income support) BDT95,000,000,000 USD1,118,304,885

(vi) BDT95 billion subsidy for agriculture.

05C - No breakdown (health and income support)
06 - Budget reallocation info_outline
07 - Central bank financing government

No amount/estimate: The Bangladesh Bank has announced that it will buy treasury bonds and bills from banks.

07A - Direct lending & reserve drawdown
07B - Secondary purchase: government securities
08 - International Assistance Received BDT368,889,947,221 USD4,342,436,106
08A - Swaps info_outline
08B - International loans/grants BDT368,889,947,221 USD4,342,436,106
08B1 - Asian Development Bank BDT111,017,757,000 USD1,306,860,000

(i) 31 March 2020, USD1.33 million under the Skills for Employment Investment Program (Tranche 1); (ii) 30 April 2020, USD100 million under the COVID-19 Response Emergency Assistance Project; (iii) April-Deceber 2020, USD404.44 million as a guarantee under the Trade Finance Program (Additional Financing) with USD351.50 million co-financing; [update] (iv) April-Decemeber 2020, USD96.41 million as a loan under Trade Finance Program (Additional Financing) with USD39 million co-financing; [update] (v) USD3 million under the TA 9950-REG: Regional Support to Address the Outbreak of COVID-19 and Potential Outbreaks of Other Communicable Diseases; (vi) 7 April 2020, USD0.2 million as a technical assistance under the Regional Project Development Support for the South Asia Subregional Economic Cooperation Operational Plan, 2016–2025; (vii) 7 May 2020, USD1 million as technical assistance under COVID-19 under Active Response and Expenditure Support Program; (viii) 7 May 2020, USD500 million as COVID-19 pandemic response option (CPRO); (vii) 20 May 2020, USD0.16 million technical assistance under Support to address Outbreak of Coronavirus Disease 2019 and Strengthen Health Systems Preparedness for Communicable Diseases in South Asia.; (viii) 30 June 2020, USD0.10 million techinal assistance under Quality Jobs and the Future of Work; (ix) 15 July 2020, USD10 million, Emergency Working Capital Support to Dairy Value Chain Project; (x) 24 July 2020, USD0.21 million technical assistance under Due Diligence and Capacity Development of Trade Finance Program Banks (Subproject 3); (xi) 5 August 2020, USD3 million COVID-19 Emergency Response; (xii) 10 October 2020, USD0.26 million technical assistance under Capacity Development for the Supply Chain Finance (Phase 2) (Subproject 3); (xiii) 4 November 2020, USD135.61 million for Khulna Sewerage System Development Project; (xiv) 5 November 2020, USD0.09 million technical assistance under "Creating Investable CIties in Post-COVID-19 Asia-Pacific"; (xv) 7 December 2020, USD50 million Microenterprise Development Project (Additional Financing) [update]; (xvi) 10 Decemer 2020, USD0.05 million technical assistance under Microenterprise Development Project; [update] (xvii) 10 December 2020, USD1.0 million technical assistance under "Supporting COVID-19 Reponse Emergency Assistance Project. [update]

08B2 - Other BDT257,872,190,221 USD3,035,576,106

(i) 3 April 2020, The World Bank approved a fast-track USD100 million financing to help Bangladesh prevent, detect, and respond to the COVID-19 pandemic and strengthen its national systems for public health emergencies. The project is financed from the International Development Association (IDA), the World Bank’s fund for the poorest countries, through the World Bank Group’s COVID-19 Fast Track Facility. The credit has a 30-year maturity, including a five-year grace period. (ii) May 2020, more than USD25.7 million assistance from USAID includes USD10 million for health and IDA humanitarian assistance to help with case-management, surveillance activities, infection prevention and control, risk communication, and water, sanitation, and hygiene programs, and more than USD15.3 million in MRA humanitarian support for vulnerable people during the pandemic, including refugees and host communities; (iii) 18 May 2020, USD250 million co-financing from AIIB for ADB's COVID-19 Active Response and Expenditure Support Program; (iv) 29 May 2020, USD732 million approved by IMF Executive Board under the Rapid Credit Facility, USD244 milion, and Rapid Financing Instrument, USD488 million; (v) 19 June 2020, USD1.05 billion provided by WB to create quality jobs and respond to covid-19 pandemic; (vi) USD500 million provided by WB to help improve road and digital connectivity and logistics in Western Region; (vii) 28 August 2020, AIIB approved USD100 million to Bangladesh for COVID-19 Response; (viii) No amount/estimate: 27 October 2020, Australia announced its COVID-19 development response plan for Bangladesh for 2020- 2021 which focuses on health security, stability, and economic recovery. (ix) 29 October 2020, South Korea to provide USD50 million soft loan to support the country’s efforts for fighting against the COVID-19 pandemic; (x) 11 November 2020, EUR93 million EU programme to mitigate the drastic economic effects of the COVID-19 pandemic on employees in the textile sector, an important industry in the country; (xi) 10 December 2020, EUR113 million COVID-19 aid for Bangladeshi garment workers. [update]

09 - International Assistance Provided
09A - Swaps info_outline
09B - International loans/grants
10 - No breakdown
11 - Other Economic Measures

BB instructed banks to waive customers interest for the period from 1 April to 31 May based unclassified loan outstanding balance as at 30 March 2020. According to the instruction, loan balance upto BDT 0.1m, waiver the whole amount of interest; loan balance more than BDT 0.1m to BDT 1m interest, interest waiver @2% annually; loan balance more than BDT 1m; interest waiver @1%. Customer wise maximum amount of waiver is BDT 1.2m.

12 - Non-Economic Measures
12A - Measures affecting travel and transport (local and international)

(i) Individuals have been requested not to leave their homes except to collect daily necessities and emergency supplies, and to wear masks when outside; and (ii) A lockdown has been imposed on 75 hotspots in Dhaka where cases have been identified, and a curfew is in operation from 6pm to 6am.

12B - Measures affecting business and workplace

(i) 23 March 2020, The government declared a general holiday from March 26 to April 4, which has been extended until May 5: government offices, private offices, and courts will be closed, commercial banks will operate shorter hours; (ii) 29 October 2020, extends closure of educational institutions till Nov. 14; (ii) November 13, school lockdowns extended to December 19.

12C - Others