Banks to provide enough fund to tanners
Wednesday, 19 December 2007
FE Report
Three new banking corporations have approved a little over Tk 3.30 billion in loan for tannery owners, enabling them to purchase raw hides and skin of sacrificial animals during Eid-ul-Azha festival.
Janata Bank Limited (JBL) will provide the highest, quick-disbursing credit worth Tk 1.52 billion, followed by Agrani Bank Limited (ABL) and Sonali Bank Limited (SBL), officials of the banks said.
The loans to be extended by ABL and SBL are Tk 1.25 billion and Tk 530 million respectively.
"Our board has already approved Tk 1.52 billion for tanners to help them procure raw hides of sacrificial animals," a senior JBL official said, adding the credit is being disbursed with relatively relaxed regulations.
In addition to the government-owned banks, a few private commercial banks will disburse loans for facilitating purchase of animal hides by the tannery businessmen during the Eid-ul-Azha festival, officials of these banks confirmed.
The total involvement of private banks -- City Bank Limited, BRAC Bank Limited and National Bank Limited -- will altogether stand at Tk 200 million, officials of the banks told the FE.
The share of SBL in quick-disbursing loan has plummeted this year from Tk 130 million last year, ostensibly because of its hefty losses incurred by the bank's exposure to foot the bill of oil imports, the bank's senior officials admitted.
"We're really in a difficult position … That's why, we have been obliged to scale down our involvement," one SBL official said.
Banking sector sources noted this year the government has relaxed the provision of providing such loans for the purchase of hides and skin by traders, considering the ongoing slump in private sector credit flows.
"This time, even a delinquent borrower will be eligible for such credits if he makes a 2.5 per cent down payment in cash while 7.5 per cent in cheque to be encashed in six months against outstanding loans," one SBL official explained.
In the past, a prospective client would have to pay 10 per cent of his total outstanding loans with banks to be eligible for fresh credits.
During the last Eid-ul-Azha festival, three nationalised banks, now turned into public companies, gave out loans around Tk 2.66 billion.
Then Sonali Bank had disbursed Tk 170 million against three parties for purchasing hide and skin during the period.
The Janata Bank Limited (JBL) also sanctioned around Tk 1.30 billion against its 21 regular parties to purchase hide and skin.
In case of Agrani, the bank had approved loans amounting to Tk 1.19 billion for eight parties to buy hide and skin of sacrificial animals during the Muslims' festival.
Another FE report adds: Prices of hides and skin of sacrificial animals are likely to be higher this year because of growing demand of the same in the international market, business insiders said.
They said during the coming Eid-ul-Azha, slaughtering of sacrificial animals is likely to be less than the previous year because of economic reasons.
Business insiders said prices of sacrificial cow hides are likely to range between Tk1700-Tk2200 compared to that of Tk1400-Tk1800 during the last Eid-ul-Azha.
When asked, they said about 3 million pieces of cow and buffalo hide and 4.0 million pieces of goat and sheep skins worth about Tk5.0 billion were collected during the last Eid-ul-Azha, which constituted almost 40 per cent of the country's yearly collection.
"This time, collection of hides and skin might help us meet 30 per cent of the yearly demand," SM Azizur Rahman, president of Bangladesh Hides and Skin Merchants Association (BHSM) said.
Md Harun Chowhdury, president of Bangladesh Tanners' Association (BTA), said they are expecting collection of about 2.5 million pieces of cow hide during this Eid.
Referring to a meeting with the officials concerned of the government on December 13, he said: "We have assured them of taking necessary measures to check smuggling of hides and skin out of the country."
However, office bearers of three associations of tanners -BHSM, Bangladesh Finished Leather, Leather Goods and Foot-ware Exporters Association (BFLLGFEA) and BTA--will hold a joint meeting on December 20 to fix price of per square foot (SF) of hides and skin of sacrificial animals.
"We are hopeful that the sellers of hides and skin will get better price this time as there will be no syndicated manipulation because of the price fixation," Md Harun Chowhdury, president of BTA said.
SM Azizur Rahman, president of BHSMA, said prices of per SF of cow hide is likely to be fixed at Tk 60 from its previous price Tk50 per SF for Dhaka city areas.
Price of hides and skin for rest of the country is likely to be set at Tk50 per SF, he said.
Aziz said prices of per SF of skin of goats, buffaloes and sheeps will remain unchanged at Tk40-Tk50 across the country.
Asked whether the poor collection will hamper the export earning, he said this is unlikely to hamper business of this sector.
The government set the country's export target for the on-going fiscal 2007-08 at $14.50 billion including $295 million for leather and leather goods.
Three new banking corporations have approved a little over Tk 3.30 billion in loan for tannery owners, enabling them to purchase raw hides and skin of sacrificial animals during Eid-ul-Azha festival.
Janata Bank Limited (JBL) will provide the highest, quick-disbursing credit worth Tk 1.52 billion, followed by Agrani Bank Limited (ABL) and Sonali Bank Limited (SBL), officials of the banks said.
The loans to be extended by ABL and SBL are Tk 1.25 billion and Tk 530 million respectively.
"Our board has already approved Tk 1.52 billion for tanners to help them procure raw hides of sacrificial animals," a senior JBL official said, adding the credit is being disbursed with relatively relaxed regulations.
In addition to the government-owned banks, a few private commercial banks will disburse loans for facilitating purchase of animal hides by the tannery businessmen during the Eid-ul-Azha festival, officials of these banks confirmed.
The total involvement of private banks -- City Bank Limited, BRAC Bank Limited and National Bank Limited -- will altogether stand at Tk 200 million, officials of the banks told the FE.
The share of SBL in quick-disbursing loan has plummeted this year from Tk 130 million last year, ostensibly because of its hefty losses incurred by the bank's exposure to foot the bill of oil imports, the bank's senior officials admitted.
"We're really in a difficult position … That's why, we have been obliged to scale down our involvement," one SBL official said.
Banking sector sources noted this year the government has relaxed the provision of providing such loans for the purchase of hides and skin by traders, considering the ongoing slump in private sector credit flows.
"This time, even a delinquent borrower will be eligible for such credits if he makes a 2.5 per cent down payment in cash while 7.5 per cent in cheque to be encashed in six months against outstanding loans," one SBL official explained.
In the past, a prospective client would have to pay 10 per cent of his total outstanding loans with banks to be eligible for fresh credits.
During the last Eid-ul-Azha festival, three nationalised banks, now turned into public companies, gave out loans around Tk 2.66 billion.
Then Sonali Bank had disbursed Tk 170 million against three parties for purchasing hide and skin during the period.
The Janata Bank Limited (JBL) also sanctioned around Tk 1.30 billion against its 21 regular parties to purchase hide and skin.
In case of Agrani, the bank had approved loans amounting to Tk 1.19 billion for eight parties to buy hide and skin of sacrificial animals during the Muslims' festival.
Another FE report adds: Prices of hides and skin of sacrificial animals are likely to be higher this year because of growing demand of the same in the international market, business insiders said.
They said during the coming Eid-ul-Azha, slaughtering of sacrificial animals is likely to be less than the previous year because of economic reasons.
Business insiders said prices of sacrificial cow hides are likely to range between Tk1700-Tk2200 compared to that of Tk1400-Tk1800 during the last Eid-ul-Azha.
When asked, they said about 3 million pieces of cow and buffalo hide and 4.0 million pieces of goat and sheep skins worth about Tk5.0 billion were collected during the last Eid-ul-Azha, which constituted almost 40 per cent of the country's yearly collection.
"This time, collection of hides and skin might help us meet 30 per cent of the yearly demand," SM Azizur Rahman, president of Bangladesh Hides and Skin Merchants Association (BHSM) said.
Md Harun Chowhdury, president of Bangladesh Tanners' Association (BTA), said they are expecting collection of about 2.5 million pieces of cow hide during this Eid.
Referring to a meeting with the officials concerned of the government on December 13, he said: "We have assured them of taking necessary measures to check smuggling of hides and skin out of the country."
However, office bearers of three associations of tanners -BHSM, Bangladesh Finished Leather, Leather Goods and Foot-ware Exporters Association (BFLLGFEA) and BTA--will hold a joint meeting on December 20 to fix price of per square foot (SF) of hides and skin of sacrificial animals.
"We are hopeful that the sellers of hides and skin will get better price this time as there will be no syndicated manipulation because of the price fixation," Md Harun Chowhdury, president of BTA said.
SM Azizur Rahman, president of BHSMA, said prices of per SF of cow hide is likely to be fixed at Tk 60 from its previous price Tk50 per SF for Dhaka city areas.
Price of hides and skin for rest of the country is likely to be set at Tk50 per SF, he said.
Aziz said prices of per SF of skin of goats, buffaloes and sheeps will remain unchanged at Tk40-Tk50 across the country.
Asked whether the poor collection will hamper the export earning, he said this is unlikely to hamper business of this sector.
The government set the country's export target for the on-going fiscal 2007-08 at $14.50 billion including $295 million for leather and leather goods.