Bangladesh Bank is going to form a special fund of 3 thousand crore taka for the traders of the garment sector of the country. It was also decided to continue the existing $3 billion EDF without shutting down the Export Development Fund (EDF) immediately. Apart from this, the central bank has assured to start the six banks’ letter of credit (LC) operations of the S Alam Group within a week. In a meeting with the leaders of BGMEA and Dhaka Chamber of Commerce and Industry (DCCI) yesterday, the governor said. Ahsan H. Mansoor informed about these decisions.
Governor Ahsan H. Mansoor held a separate meeting with the top leaders of these two organizations of traders yesterday. In the meeting, DCCI urged the Central Bank to increase credit flow to the Small and Medium Enterprises (SME) sector of the country. At this time, the leaders said that Bangladesh Bank has several schemes or programs for financing the SME sector, the financing process will be easier if their activities can be accelerated.
Earlier, a delegation led by BGMEA President Khandaker Rafiqul Islam, Finance Advisor of the Interim Government. Salehuddin Ahmed also met. There they ask for a loan of around 2 thousand crore taka on easy terms for the garment sector.
In the meeting held with the Governor at the Central Bank, President of Dhaka Chamber Ashraf Ahmed said, “If the interest rate increases, there is a danger that credit flow will be interrupted, especially in the SME sector.”
The President of Dhaka Chamber called upon the Central Bank to take initiative on how to further reduce the existing interest pressure in getting loans in the SME sector. Regarding the increase in the policy interest rate, he said, ‘Increasing the policy interest rate is a common process to control inflation; But we think it is applicable for a temporary period.
Ashraf Ahmed said, “Inflation should be controlled, it is also our expectation. Because inflation increases the cost of living of the general public as well as the cost of doing business for businessmen. Besides, if it is possible to reduce the amount of bad loans of the bank, the policy interest rate will also decrease.
The central bank has already taken initiatives to bring stability to the financial sector. Welcoming this, the president of Dhaka Chamber said, “In order to develop the SME sector, support is needed to deal with the pressure of interest rate increase and to maintain the flow of credit.”
Bangladesh Bank Governor Ahsan H Mansoor said, “If inflation can be brought down to a tolerable level within six to seven months, positive effects will be observed in various areas including policy interest and bank loan interest.” It has become essential to raise the growth in bank deposits to double digits.
The Governor emphasized on making credit guarantee facilities more operational for the SME sector. He also emphasized on limiting the amount of government borrowing to increase the flow of credit to the private sector. In addition, the governor urged entrepreneurs to review the payment history or payment history and increase their credibility in the case of giving trade credit or commercial loans.
Ahsan H. Mansoor said that a banking commission will be formed soon, based on which the necessary roadmap and roadmap will be prepared to bring stability in the financial sector. He also advised new investors to invest in economic zones.
In a meeting with the governor, BGMEA leaders said that the LC activities of six banks under the control of S Alam Group have been stopped. Because of this, the import-export activities of the traders associated with the banks have stopped. Considering the overall situation, it is demanded to take necessary steps to reactivate the LC activities of these banks. In view of this, the governor of the central bank assured that the board of these banks will be reorganized within a week. After that the LC ban will be lifted. Businessmen have to be patient for a few more days.
At this time, the businessmen requested to continue the existing fund of 3 billion dollars instead of closing the export development fund. The governor assured to look into the matter. Then a third demand was raised by BGMEA. They said that the garment sector has been severely affected by the ongoing unrest in the country for two months. The support of Bangladesh Bank is needed to keep the exports going and to survive in the international trade competition. For this purpose, it is necessary to form a special fund (soft loan) of 3 thousand crore rupees. The business leaders also promised to return this money with interest within one year. In view of this application, Bangladesh Bank has assured to take effective measures soon, according to the source of the meeting.
After the meeting, BGMEA senior vice-president Abdullah Hill Rakib told reporters, “Bangladesh Bank has agreed to launch a soft loan package of Tk 3,000 crore. Besides, EDF activities will continue. The governor assured to solve the LC problem of six banks quickly.
