The tannery owners have demanded of the central bank and the government to instruct all the banks to ensure full-fledged implementation of the incentive package offered to help relocate the leather processing factories from Hazaribag to Savar.
Bangladesh Bank on Sunday offered an incentive package including transferring irregular loans to block accounts, moratorium facilities and flexible payment term for the owners to help move their factories to a designated industrial park in Savar.
The central bank came up with the directives as the tannery businessmen were facing fund crunch to relocate their factories as per the government directives.
“We have just relaxed the rules to give a cushion to the banks so that they can help tannery owners to meet fund shortage,” said Chowdhury Md Feroz Bin Alam, BB general manager of Banking Regulation and Policy Department.
“But if the banks do not comply, we cannot take action against them,” he said, adding that the government can direct them to do so.
The tanners had been demanding funds and policy support from the government and the bankers.
Bangladesh Tanners Association (BTA) General Secretary said: “Off course, the incentive package would help the owners relocate factories, if it is implemented.”
For full-fledged implementation of the incentive package, the government and the central bank have to instruct all scheduled banks to comply with the circular, he told the Dhaka Tribune.
The BTA has 155 members, of which 105 from tannery and 50 from finished leather and footwear exporters. About 80 tanneries already had started the process of relocation and the rest would start soon.
“In the past, we had seen that there were a number of initiatives for the sector, but we hardly saw any proper implementation and cooperation from the stakeholders concerned,” the tanners alleged.
“The initiative is praiseworthy and it will expedite the process of relocation,” Shaheen Ahmed, chairman of BTA said.
Bangladesh Small and Cottage Industries Corporation (Bscic) Project Director allocated 205 plots for relocation and distributed those among 155 tanners who were operating in Hazaribagh.
The move of tannery relocation came following the widespread demands from the buyers and rights organisation from home and abroad to avert ecological impact and health hazards.
In recent times, some buyers specially from the US market warned that they would not source anything from factories, which are not compliant, Mosharaf said.
To retain the buyers, making the factories compliant through relocation is a must, he added.
Following a public interest litigation, the High Court in June 2009 asked the government to relocate the tanneries from Dhaka to a proposed leather estate at Harindhara, Savar by February 28, 2010 or face shutdowns. The government has repeatedly sought more time.
According to Export Promotion Bureau (EPB), In the last fiscal Bangladesh earned $1.30 billion, exporting leather, leather products and footwear.
Of the total amount, Bangladesh earned $240 from leather products, $505.50 million from leather and $550 million from footwear.
