Pubali Bank PLC has signed a participation agreement with Bangladesh Bank to join the central bank’s Tk 3,000 crore Export Diversification Refinance Scheme.

The programme is designed to reduce Bangladesh’s dependence on the ready-made garment sector by supporting the development of additional export-oriented industries.

AKM Nurunnabi, director of the Sustainable Finance Department at Bangladesh Bank, and Mohammad Ali, managing director of Pubali Bank PLC, signed the agreement at Bangladesh Bank headquarters in Motijheel, Dhaka.

The refinance scheme aims to broaden Bangladesh’s export base while increasing the production capacity of promising export-oriented industries.

It is also intended to encourage businesses to develop new export products, enter additional international markets and improve their competitiveness.

Under the Export Policy 2024-2027, industries classified as Highest Priority Sectors and Special Development Sectors will be eligible for financing under the programme.

Exporters that use locally produced raw materials will also receive priority.

The financing structure provides participating banks with access to relatively low-cost funds from the central bank.

Bangladesh Bank will provide refinancing to participating banks at an interest rate of 4 percent.

Eligible exporters will then be able to obtain financing through participating banks at a maximum interest rate of 7 percent.

The refinance facility will have a maximum tenure of three years.

That period can include a grace period of up to six months, depending on the applicable financing arrangement.

Pubali Bank said its participation in the scheme would allow it to extend financing on favourable terms to promising export-oriented businesses.

The bank expects the facility to support industries seeking to develop new products and explore export opportunities outside Bangladesh’s traditional export base.

Export diversification has become increasingly important as Bangladesh continues to depend heavily on ready-made garments for its merchandise export earnings.

Developing additional export sectors could help the country broaden its sources of foreign exchange and reduce concentration risks associated with dependence on a limited number of products.

The refinance programme is also expected to contribute to employment generation by supporting investment and expansion in emerging export industries.

Greater production capacity and access to new overseas markets could further strengthen the competitiveness of Bangladeshi exporters.

Mohammad Isha, deputy managing director of Pubali Bank, attended the agreement-signing ceremony.

Md Nazrul Islam Sarker, general manager and head of the bank’s RMG division, was also present along with senior officials from Pubali Bank and Bangladesh Bank.

The participation agreement adds Pubali Bank to the financial institutions through which eligible businesses can seek financing under Bangladesh Bank’s Tk 3,000 crore export diversification initiative.