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Loans for tanners from Covid funds

Buying rawhide during Eid

SYFUL ISLAM | June 30, 2020 00:00:00

Tanners will get loans from Covid-19 incentive packages to buy raw hides during the upcoming Eid-ul-Azha, a meeting has decided.

The financial institutions division at a meeting on Monday asked the central bank to incorporate the 'tannery loans' in any of the Tk 1.0 trillion incentives packages that the government announced to overcome the impacts of coronavirus on trade and industry.

The tannery owners at the meeting, held at Bangladesh Secretariat, demanded Tk 6.0 billion fresh loans, keeping their dues in a bloc account for three years.

President of the Bangladesh Tanners Association (BTA) Shaheen Ahamed told the FE the sector is facing immense trouble since 2017.

He said the banks, though, claim providing more than Tk 6.0 billion every year for buying raw hides, actually they do not pay the amount of money.

"Actually, before Eid-ul-Azha, they pay a similar amount of money we repay the loans throughout the previous year," Mr Ahamed said.

"They just renew our old loans instead of paying fresh loans," he said.

According to him, last year the sector got some Tk 6.90 billion, a mixture of old and new loans.

"Unless they put our old loans in block account for several years the loans this year also would not be beneficial for us," he said.

Every year between 80 and 90 tannery companies get loans from the banks before Eid-ul-Fitr, said Mr Ahamed.

According to a senior finance ministry official, since the tanners this time will get loans from incentive packages, the interest rate will be 9.0 per cent. The government will bear half the interest.

Senior Secretary of Financial Institutions Division Ashadul Islam told the FE he asked the central bank deputy governor to examine how the loans for buying rawhides could be incorporated in the incentive packages.

"We have asked them to submit recommendations shortly," he said.

Central bank deputy governor Ahmed Jamal and managing directors of state-owned banks, attended the meeting, among others.

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