Dhaka: Bangladesh Bank (BB) has reduced the interest rate of green transformation fund for export oriented textile and textile products and leather manufacturing industries to encourage the use of the fund. 

"In order to encourage Authorised Dealers (ADs) to use the fund, it has now been decided that reduced interest rate six-month USD LIBOR plus 1 percent shall be charged to ADs instead of existing six-month USD LIBOR plus 2.25 percent against the financing," according to a BB circular issued here today. 

The circular also said ADs will determine their own loan interest rates to the borrowers covering their cost of borrowing from the Fund and operational expenses, plus a reasonable risk-adjusted spread and profit margin (now typically expected to be in the range of 1.00 to 2.00 percent above the cost of borrowing).

Other instructions in this context shall remain unchanged, the circular added.