Broach banking to RMG workers

The finance ministry has received a directive from government high-ups for providing a specific outlook on proposed banking to apparel workers by a new rural bank within this month.
Officials said the prime ministers' office (PMO) sent in the instruction to the ministry about the micro-savings programme proposed by Palli Sanchay Bank (PSB).
The move gathers momentum although the Bangladesh Bank (BB) had differed with the proposal earlier, they said.  
The PKB recently sent a letter to the principal secretary for kind consideration of the initiative for introducing the programme. The bank authority also requested the PMO to present the proposal to the prime minister, they added.
A senior official at the PMO told the FE that chairman of the bank Mihir Kanti Majumder, in a recent letter to the office, proposed bringing some four million readymade garment (RMG) workers under the micro-savings programme to promote their saving habits.
The chairman of the rural savings bank had proposed earlier also that the Ministry of Finance (MoF) take step for putting the workers under cover of the programme so they could save some portion of their small wages.
Officials said the ministry had sent the proposal to the BB for its opinion on the initiative towards spreading the newly introduced rural bank's wings to the RMG industrial belts build in and around towns and cities.
The central bank found the move out of purview of the specialised bank, established only to provide banking services to the unbanked poor and underprivileged people in rural areas.
The government converted the 'Ekti Bari Ekti Khamar' project to a bank and turned each of the offices of the samities (associations) under the project into bank branches. Prime Minister Sheikh Hasina inaugurated 100 such branches in one go through videoconferencing on June 22 last year.
The bank encourages the samity members for saving and provides loans with or without collateral.
Mr Majumder proposed that the bank, alongside running the micro-savings programme in rural areas, will also conduct operations in urban areas for apparel-sector workers.
He also suggested depositing 50 per cent of the incentives of Tk 15 billion given to the apparel sector each year with the RMG workers' welfare savings fund.
The central bank, in a previous letter to the MoF, had pointed out that the Palli Sanchay Bank got licence for carrying out banking in rural areas, not in urban domain. It should work only for the welfare of members of the samities of 'Ekti Bari Ekti Khamar' initiative.
The Bangladesh Bank said most of the garment factories are located in urban areas and their workers also live near the factories. Thus, neither the apparel factories nor their workers fall within the purview of the PSB.
It also said cash incentives are given to apparel-factory owners to support their business. They would not agree to pay 50 per cent of the amount into the workers' welfare fund.
When contacted, PSB chairman Majumder told the FE it is an urgent need to launch the programme for fostering saving attitude across the country.  
"The bank is conducting the programme in rural areas. It is likely to run same programme in urban areas, too, for apparel-sector workers."
He thinks this development will play a vital role in woman empowerment and financial security of the womenfolk if the plan is implemented.    
Currently, he said, the 'Ekti Bari Ekti Khamar' backyard farming and banking activities are going on concurrently.
The Palli Sanchay Bank was formed with Tk 2.0 billion paid-up capital of which Tk 1.20 billion is being provided by the government.
Presently, there are 40,101 associations under the government-sponsored 'Ekti Bari Ekti Khamar' project.
Some 2.4 million members are involved with those associations, whose savings came to over Tk 10 billion. From the bank, the association members will get loans at less than 10 per cent interest.
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