They proposed that BB maintains the loan facility with the opportunity to reschedule default loans without stopping the ongoing financing
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) urged Bangladesh Bank (BB) to extend its support to the RMG industry in turning around from the economic fallout caused by the Covid-19 pandemic.
They proposed that the central bank maintain the loan facility with the opportunity to reschedule default loans without stopping the ongoing financing if an individual, company or a group of companies becomes a loan defaulter.
According to the BGMEA, the central bank issued a circular where the bank directed to add 30% local VAT with respect to all incentives.
But this will be greatly harmful for weavers, and to some extent, the knitters.
The BGMEA urged to amend the circular.
They made the request during a meeting with the central bank governor Fazle Kabir at the BB head office on September 21.
SM Mannan (Kochi), senior vice-president and current acting president of the BGMEA, led the BGMEA delegation.
Kochi thanked the Bangladesh Bank for providing crucial policy support to the apparel industry at a very delicate time, which helped them to make a turnaround.
However, the BGMEA leaders said that the pandemic was not over, and further help was needed for Bangladesh to regain competitiveness in the global market.
The apex body of the apparel manufacturers also proposed to increase the number of loan repayment instalments from 18 to 36 with respect to the incentive provided for the payment of the wages and allowances of the apparel workers.
Moreover, the BGMEA also requested to amend the BRPD circular number 08 on incentive packages, April 12, 2020, as exporters may not be able to fulfill all the conditions mentioned in the circular in the present circumstances.
According to the BB circular, if any exporter fails to repay any pandemic incentive loan within due time, then the central bank will charge full interest rates instead of the 4.5%. BGMEA requested to amend the condition.
The BGMEA also urged the central bank to reduce the export development fund (EDF) interest rate from 2% to 1.5%, in an attempt to ensure the survival of the export-oriented industry during this Covid-19 period.
The apparel manufacturers’ organization also proposed to reschedule loans along with abolishing certain charges for all the RMG factories who failed to repay their loan instalments in due time.
In the meeting, the BGMEA delegation included former BGMEA President Md Siddiqur Rahman, incumbent First Vice-President Syed Nazrul Islam, Vice-President Shahidullah Azim, Vice-President (Finance) Khandoker Rafiqul Islam, Vice-President Md Nasir Uddin, Vice-President Rakibul Alam Chowdhury and Directors Asif Ashraf, Md Khosru Chowdury, Rajiv Chowdhury, Md Imranur Rahman and Mohammed Meraj-E-Mostafa (Kaisar).
Deputy Governors of Bangladesh Bank Kazi Sayedur Rahman and Abu Farah Md Nasser were also present at the meeting.