Obtaining foreign loan in Bangladesh has become very common in past few years because of the low interest rate and the intention of the lender to expand their business in such sector. The procedure as to how to obtain a foreign loan in Bangladesh.

Step by Step Procedure to Obtain Foreign Loan in Bangladesh

In order to obtain foreign loan in Bangladesh, the Borrower has to take prior approval from Bangladesh Investment Development Authority (BIDA) for license issued by the Prime Minister’s Office and therefore the Borrower must submit the following documents along with the duly filled in prescribed application form with a forwarding letter in the Letter Head of the entity:

1. Board Resolution of the Company for the proposed foreign loan;
2. Copy of the latest registration form of BIDA duly attested by First Class gazette officer;
3. Original copy of the Loan Agreement between the parties;
4. Copy of the detailed repayment schedule for the lender;
5. Original copy of the grade period;
6. Duly filled in CIB Inquiry form 1&2 and undertaking from its Sponsors or Directors;
7. Credentials of the sponsors or directors;
8. CIB Certificate of the company and its sponsors;
9. Track record of past foreign loans/deferred payment (if available);
10. Audited Balance Sheet of previous year;
11. Utilization Certificate from nomited Bank;
12. Updated credit rating report of the company;
13. Updated financial analysis;
14. Updated feasibility report of the proposed project in detail;
15. Form-X, Form-XII and Form-XV from RJSC&F;
16. Certificate of Incorporation of commencement;
17. Memorandum & Articles of Association;
18. Proforma Invoice or Price Quotation (where applicable);
19. Original copy of the Bank Solvency Certificate;
20. Descriptive statement of the use of the loan;

Obtaining BIDA Clearance for Foreign Loan in Bangladesh

After collecting the prescribed application from BIDA, the applicant has to submit these aforesaid documents with it along with the applicable license fee and send them to the Security Committee of Bangladesh Bank for scrutinization. After examining the submitted documents, if the committee issues the clearance, BIDA shall accordingly issue their approval for the loan as per their recommendation. Here, the official time limit for such process shall completely depend on the Borrower for collection of documents and to some extent on the Scrutiny Committee to conduct the meeting and the fee schedule for approval shall tentatively be between BDT 5,000 to BDT 1,00,000 depending on the amount of lending money.