The Bangladesh Garment Manufacturers and Exporters Association demanded one year extension of the rescheduling facility for recession-effected industries.
Meeting the governor of the Central Bank on Sunday, a BGMEA delegation headed by its president Abdus Salam Murshedy also demanded five per cent subsidy on the interest of bank loans of the industries.
Export industries especially the garment units are struggling hard to compete in recession-hit western markets so they had sought interim fiscal supports from the government, said BGMEA president.
He argued, ‘We need to reduce production cost because our competitors in China, India and Egypt are blessed by low cost finance there and so they are set to compete out us from recession-hit and price sensitive markets.’
A few weeks back, the government had decided that exports units in selected sectors would have opportunity for rescheduling their unpaid bank loans, for next six months.
Such rescheduling requires no down payment and the facility was announced to be availed up to the end of September.
Sources at the BB governor office told New Age that the BGMEA leaders also demanded that the existing $150 million dollar Export Development Fund would be doubled immediately.
The EDF provides loans to exporters at a lower interest rates and flexible conditions.
UNB adds: Bangladesh Bank also assured the delegation of considering loans at only one percent interest for construction of dormitories for the garment workers.
The central bank also turned down a proposal to cap the interest rate of leasing and finance companies similar to the banks’ lending rates considering that the leasing and finance companies borrow money from the banks at higher rates to lend others.
Deputy Governor of Bangladesh Bank, Ziaul Hassan Siddiqui, told reporters after the meeting BGMEA demanded a premium of Tk 10 against each dollar of their exports, ‘We don’t have a dual exchange rate policy.’
Source: The Daily New Age, 01 June 2009