BB to introduce Tk 2.0b refinance scheme
Rezaul Karim | Tuesday, 11 March 2014
The central bank is going to introduce a Tk 2.0 billion refinance scheme aiming to revive the country's jute sector through ensuring fair price at the farmers' level, official said.
A meeting will be held today (Tuesday) in the conference room of the Bangladesh Bank (BB) where the terms and conditions of the refinance scheme will be decided upon by reviewing various concerned matters.
Deputy Governor S K Sur Chowdhury will preside over the meeting. It is the second such meeting in this connection.
Bangladesh Jute Mills Association (BJMA) requested the central bank in December to provide the entire Tk 2.0 billion to them under the scheme so that the required raw materials could be purchased.
The BB has been including more and more sectors under its refinance scheme in the wake of growing demand for boosting activities of different sectors in the country, sources said.
The businesspeople in the jute sector including owners of jute mills will get bank loans with a lower rate of interest under the refinance scheme, BB sources said.
The fund of the refinance scheme will come from the BB's own fund. The banks would get the loans at five per cent interest rate from the refinance scheme and the businesspeople would get the finance at seven to eight per cent interest rate from the banks, they said.
The BJMA has set a target to procure 1.2 million bales of raw jute for the FY 2013-14, sources said.
A large number of jute mills are facing severe financial crisis. Many of them have already declared layoffs in the recent months, industry insiders said.
Besides, the country's jute mills are facing various other problems. The demand for jute products has declined significantly in the international market due to world recession and political unrest in the Middle East, they said.
Presently, there are 238 jute manufacturing units in the country. Of these, 90 private sector spinning mills produce jute yarn and 18 state-owned mills under the Bangladesh Jute Mills Corporation (BJMC) and 130 private jute mills under the BJMA manufacture hessian, sacks and bags.