B Mirror Report: Bangladesh Bank (BB) has instructed all scheduled banks to set and implement specific credit targets for raw hide traders to ensure smooth collection, preservation, and marketing of hides during the upcoming Eid-ul-Azha season.

The directive was issued today through a BRPD circular, underscoring the leather sector as a key labour-intensive and export-oriented industry that contributes significantly to national income and foreign exchange earnings, largely driven by domestic raw materials.

According to the circular, around 50 percent of the industry’s annual raw material supply comes from animals sacrificed during Eid-ul-Azha, making timely and adequate financing essential for maintaining stability in the sector.

To ensure sufficient liquidity, the central bank directed that the credit target for raw hide purchases in 2026 must not be lower than the target set for 2025.

It also emphasized that financing should reach grassroots-level traders, allowing seasonal buyers and small-scale merchants to actively participate in procurement. Loans are to be disbursed based on established bank-client relationships.

In addition, BB has allowed rescheduling and relaxation of existing loans, including those of defaulted borrowers in the leather sector, to facilitate fresh financing ahead of the season.

Banks have been instructed to complete the rescheduling process, including compromised amount arrangements, by June 30, 2026, enabling borrowers to clear outstanding dues and access new funds.

For monitoring purposes, all scheduled banks must submit detailed reports on credit targets and actual disbursements to the Banking Regulation and Policy Department-1 by July 31, 2026. The directive was issued under Section 45 of the Bank Company Act, 1991.