Banks have been asked not to impose over 1 per cent interest on the exporters after disbursing fund from their own pocket and before being reimbursed from Bangladesh Bank's export development fund (EDF).

The banking regulator issued a notice in this regard as many banks have allegedly charged a 7 per cent interest rate on lenders illogically during the time, a central bank official said.

Banks initially disburse the funds to borrowers from their own sources and they get reimbursement from the EDF.

The banks informed the central bank that they had imposed a high interest rate to address their cost of funds before getting the reimbursement, the BB official said.

As per the central bank policy, the exporters in the manufacturing sector are allowed to get the fund at 2 per cent interest, of which lenders can enjoy 1 per cent interest.

The BB in its notice said that the ongoing export trend created a huge demand for input procurements, leading to pressure on EDF loans, the volume of which now stands at $7 billion.

Imposing the ceiling will help exporters run their industries in a smooth manner, the official said. 

Export receipts hit $4.76 billion in March, the highest ever on record in a single month, posting 55 per cent growth year-on-year.

In March, the total earnings from shipping goods abroad rose 33.4 per cent year-on-year to $38.6 billion in nine months since July of 2021-22 fiscal year.