Bangladesh Bank (BB) has instructed banks to start disbursing a stimulus package of Tk 1,000 crore from next week for the tourism and hospitality sector, one of the most financially promising areas of the country, battered by the spread of Covid-19 pandemic.
The stimulus package announced by the central bank recently, is expected to help the sector overcome the fallouts of Covid-19 that have severely affected tourism and hospitality, one of the country's 15 major sectors.
As per the BB's guidelines, hotels, motels and theme parks will receive working capital loans from banks for a period of one year at the rate of 8 percent interest. Of the interest rate, the government will bear half and the borrowers will have to pay the rest.
The sector has incurred losses equaling Tk 20,000 crore in the last year due to the pandemic, according to Tour Operators Association of Bangladesh (TOAB) which has claimed that several lakh people are directly and indirectly involved in the sector.
"We've instructed banks to disburse the loans to the borrowers of the tourism industry based on bank-customer relationship along with ensuring our rules and regulations properly," said a central bank official.
To ensure proper disbursement of the refinance fund, the central bank asked commercial banks to set the loan disbursement target from the refinance fund on their own and send it to the BB’s banking regulations and policy department by July 25.
The central bank will later set the finalised bank-wise loan disbursement limit.
Businesses of the sector which had earlier taken loans from other stimulus schemes of the BB will not be allowed to avail loans under this new scheme.
TOAB said the country's hotels and theme parks have been facing a severe crisis since March last year.
A leader of TOAB said tourism added 4.4 percent to the GDP in 2019 and about four million people involved in the industry are now going through untold hardship.
"After the first wave of Covid-19, Bangladesh's tourism industry was trying to recover some damage through domestic tourism, but due to the second wave of coronavirus, the industry again fell into serious uncertainty," said the TOAB leader.
Tourism contributes significantly to the nation's tax revenue earning and in the fiscal (FY 2019-20), the National Board of Revenue (NBR) collected Tk 766 crore as travel tax from the sector. But for understandable reasons, in the last fiscal year (FY 21), the collection dwindled to less than half that amount to Tk 328 crore.