Bangladesh Bank (BB) Governor Md. Mostaqur Rahman on Wednesday assured garment exporters that cash incentives would be released on a monthly basis to ease the ongoing liquidity crisis in the country's readymade garment (RMG) sector.
The Governor made this commitment during a meeting with a delegation from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), led by its President Mahmud Hasan Khan, at the central bank headquarters, according to UNB report.
During the meeting, the BGMEA President highlighted the multifaceted challenges facing the industry due to global economic instability and internal constraints.
He noted that while many banks have restructured loans, they are not providing sufficient working capital, hindering factory operations and timely debt servicing.
The BGMEA leaders proposed several measures to safeguard the industry and encourage new entrepreneurs, including:
Increasing special cash incentives from 0.30 percent to 1 percent.
Raising alternative cash assistance from 1.5 percent to 2 percent and for SMEs from 3 percent to 4 percent.
Reducing the interest rate on Packing Credit (PC) to 7 percent.
Expanding the Pre-shipment Credit Refinance Scheme from Tk 5,000 crore to Tk 10,000 crore and extending its tenure until 2030.
Responding to the proposals, Governor Mostaqur Rahman stated that no applications for cash incentives would be kept pending. He assured the delegation that the central bank would implement a system to release the incentive funds within the same month the applications are processed.
The delegation also raised concerns regarding the inability to encash Fixed Deposits (FDRs) and export proceeds held in several Shariah-based banks currently facing liquidity shortages.
They informed the Governor that many factories are struggling to pay workers' wages and utility bills due to these frozen funds. In response, the Governor promised special monitoring by the central bank to resolve these issues.
The BGMEA delegation included Directors Majumdar Arifur Rahman and Dr. Rashid Ahmed Hosaini, and Abdullah-al-Mahmud Mahin, Managing Director of Mahin Apparels Ltd. High-ranking officials of Bangladesh Bank were also present at the discussion.
Industry leaders expressed hope that these swift interventions by the central bank would help the RMG sector navigate global challenges and maintain stability in the labor market.
