The unstable situation going on in the country for the past two months has significantly impacted the garment sector. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has sought the assistance of Bangladesh Bank to recover from losses and remain competitive in international trade.
On Wednesday 27 August 2024, BGMEA President Khandoker Rafiqul Islam led a delegation to meet with Dr. Ahsan H. Mansur, Governor of Bangladesh Bank, at the Bangladesh Bank Bhaban. During the meeting, the delegation made the request for the support from the central bank.
The BGMEA delegation included Senior Vice President Abdullah Hil Rakib, Vice President Rakibul Alam Chowdhury, Directors Mohammad Sohel Sadat, Mesbah Uddin Khan, and Md Rezaul Alam (Miru). BKMEA Executive President Fazlee Shamim Ehsan was also present.
BGMEA President Khandoker Rafiqul Islam highlighted the severe impact of the recent political unrest on the garment industry, noting that many factories had been hit hard.
He requested a loan equivalent to one month’s wages for garment workers on easy terms to help stabilize the sector. The delegation assured the Governor that the loan would be repaid with interest within a year.
The delegation also expressed concerns over Bangladesh Bank’s recent decision to reduce the Export Development Fund (EDF) limit. They said that further reductions could exacerbate difficulties for garment exporters. They requested that the EDF limit remain unchanged and that priority access to EDF funds be provided through scheduled banks.
Additionally, the BGMEA delegation highlighted the disruption caused by the recent closure of LC operations at six banks, which has halted import-export activities for associated companies. They urged the Governor to take steps to reactivate these LC operations.
To address ongoing challenges and support future growth, the BGMEA leaders proposed several policy measures:
– Extending the number of loan repayment installments from 3 to 6, as was done last year;
– Providing special protection to factories in light of banking sector reforms;
– Protecting businesses from punitive actions against individuals;
– Establishing a task force with NBR and Bangladesh Bank to develop industry-friendly policies.
The Governor of Bangladesh Bank listened to the issues presented by the BGMEA delegation. He acknowledged the garment industry’s significant contribution to the national economy and assured them of the bank’s continued support. He assured the delegation of considering their recommendations seriously and to arrange a soft loan for garment traders.
Additionally, the Governor assured that the EDF limit would not be reduced further and that efforts would be made to resolve the LC issues with the six banks.