The monitoring cell of the finance ministry has given an opinion in favour of the default raw jute exporters for solving their existing banking problems as they have long been pressing for putting their default amount in a block account to get rid of annual interest count.
Financial analyst of the finance ministry Dr. Narayan Chandra Singha yesterday sent a letter to the secretary of bank and financial institutions division Dr. M Aslam Alam with such an opinion, which will help the default raw jute exporters in getting relief from the interest of bad loans.
Earlier, labour and employment ministry sent a letter to the finance ministry with a request to allow the defaults exporters to put their loan in block accounts for not imposing any extra interest on their bad loans each year.
According to the letter, banking division will advise the commercial banks to block the accounts of the default loans occurred in between January 2009 to December 2013 for the raw jute exporters for three years with a fixed interest rate at 8%.
Default raw jute exporters will repay their loans in the next 10 years, reads the mentoring cell letter.
In November, last, the raw jute exporters had placed a rescue package to the finance division for getting fresh credit from the commercial banks.
The exporter suggested to the finance minister to keep Tk250 crore on account of outstanding bank interest charges in a blocked account for 10 years, so they could get fresh loans .
The interest charges on outstanding bank credits for some 300 exporters, had accumulated with banks over a decade. The interest and principal amount owed to different state-owned and private banks totaled about Tk1000 crore.
The Bangladesh Jute Association (BJA) in its demand said the accumulated interests may be transferred to ‘Blocked Account’ in banks.
Jute had seen some good days in the last few years. But it now faces hard times due to political turmoil in the Middle East and the global recession.
Thousands of jute growers and employees in the jute sector have already started feeling the pinch with the fall in prices of both raw jute and jute goods. The prices of jute goods have fallen by 20% in the international market.
Bangladesh produces around 1.26m tonnes of raw jute annually, of which 0.8m tonnes are for the local market while 0.30m tonnes are exported.