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Working Capital Finance

A. Policy :
Working Capital may be financed to a project depending
on the following policies:
  • To be a BSB-financed project.
  • The unit should be a profitable concern .

A Cement factory fininced by BSB
B. Conditions:
The General terms & conditions applicable for the short term credit may be summarized as under:-
  • For Hypothecated loan limit :
    Mortgage of assets valuing twice of loan amounts
  • For pledged loan limit
    Mortgage of all goods, raw materials purchased under finance. In addition, mortgage of additional security amounting twice of loan amount.
  • General :
        (a) Current ratio should be mantained as 1.3 ;
        (b) Rate of interest should be fall quarterly basis as per rules circulated by Bangladesh              Bank and BSB;
        (c) Period of loan should he one year;
        (d) Renewal of loan should depend on total recovery of loan & interest; and
        (e) The loan will be governed by all terms & conditions in BSB Manual for Commercial               Banking.

C. Procedures:
The standard procedures may be classified as under:

At processing stage:
(a) Loan application should be submitted in BSB's specified Form;
(b) Fully documented all loan case should be placed before the Credit Committee for its      recommendation
(c) Assets to be mortgaged as security should be inspected by Bank Officials, as per effective      circulars;
(d) Loans should be sanctioned by the competent authority as per delegation of power; and
(e) All processing should be completed within three months (after submission of fully      documented loan application form)

At disbursement stage

(a) All disbursement should be governed by the terms & conditions specified in the sanction      letter.
(b) Documentation should be completed within one month after issuance of Sanction letter.