Apparel exporters to get cash incentive against advanced TT

Siddique Islam | December 13, 2013 00:00:00

The government is set to allow apparel exporters to receive cash incentive against export proceeds realised in advance through telegraphic transfer (TT) soon to help recover their loss caused by the ongoing political turmoil.

After introducing the facility the ready-made garment (RMG) exporters will be allowed to receive cash incentive against advanced TT before shipment of their goods.

"We're working on the issue," a senior official of the Ministry of Finance (MoF) told the FE Thursday.

Currently, apparel and textile sector entrepreneurs are getting cash incentive against realisation of their export proceeds after documentary collection.

The MoF has taken the latest move following discussion on the issue at a meeting between Finance Minister Abul Maal Abdul Muhith and the leaders of apparel and clothing sector trade-bodies Wednesday.

Earlier on March 5, the finance minister assured the leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA) and Cotton Importers Association of taking necessary measures for allowing cash incentive against advanced TT.

Later, the MoF sent a letter to the Bangladesh Bank (BB), seeking opinions on allowing cash incentive against advanced TT for textile and clothing sector businesses, according to another senior official.

The central bank submitted a report with positive opinions on the issue to the MoF on May 19 last.

"Since TT is a recognised and largely used system for payment of export proceeds repatriation, there is a scope to consider it in making payment for cash incentive," the BB said in its four-page report.

The officials also said the central bank will issue a circular in this regard after getting the MoF's final approval.

The apparel sector, which accounts for about 80 per cent of the country's total export, has been under tremendous pressure since October, following frequent spells of blockade and shutdown, enforced by the main opposition parties.