Textile mills demand BB dispute settlement cell to solve LC rows
Friday, 4 September 2009
Monira Munni
Textile millers on Thursday demanded a dispute settlement cell in the central bank to resolve increasing number of rows over letters of credit between banks and the local importers.
The Bangladesh Textile Mills Association (BTMA), the country's one of the biggest trade groupings, made the demand to the Bangladesh Bank governor, saying a lot of mills had to wind up business and incur losses due to the LC related problems.
"There are instances that a number of Bangladeshi textile mills were shut down due to disputes over letter of credits," Abdul Hai Sarker president of BTMA said, after meeting BB chief Atiur Rahman at the latter's office.
"We have formally requested the governor to urgently set up a dispute settlement cell to resolve these problems. Otherwise, these nagging issues would affect the country's entire export import trade," he said.
The association chief said many banks also don't abide by the BB's rules and regulations on LC acceptance with some delaying payment on various excuses, which resulted in a hike in export cost.
"As a result, many mills are losing out on competitive advantages over their competitors in other countries," he said and added that BB governor has assured them of addressing the problem as soon as possible.
According to the BTMA, the country has around 1300 textile mills with cumulative investment of Tk40,000 crore ( Tk400 billion) --- the biggest by an industrial sector.
But Sarker said many of these factories have not implemented waste treatment plant due to the exorbitant cost of the machinery.
Bangladesh Bank has recently offered Tk10 million credit at an interest rate of nine per cent for the factories planning to install effluent treatment plant.
Sarker said the BB should raise the lending cap to Tk 30 million as the cost of ETP is very high in international market.
The textile mills association urged the governor to bring down lending rate to a single digit, saying the decline would inject new momentum in the country's dismal investment scenario.
Sarker said they demanded narrowing the lending gap between the government and non-government banks in an effort to bring competitive environment in the country's banking system.
The BTMA in its proposal also urged the governor to make the textile spinning and dyeing-printing-finishing factories eligible for the export development fund (EDF) of the central bank.
Textile millers on Thursday demanded a dispute settlement cell in the central bank to resolve increasing number of rows over letters of credit between banks and the local importers.
The Bangladesh Textile Mills Association (BTMA), the country's one of the biggest trade groupings, made the demand to the Bangladesh Bank governor, saying a lot of mills had to wind up business and incur losses due to the LC related problems.
"There are instances that a number of Bangladeshi textile mills were shut down due to disputes over letter of credits," Abdul Hai Sarker president of BTMA said, after meeting BB chief Atiur Rahman at the latter's office.
"We have formally requested the governor to urgently set up a dispute settlement cell to resolve these problems. Otherwise, these nagging issues would affect the country's entire export import trade," he said.
The association chief said many banks also don't abide by the BB's rules and regulations on LC acceptance with some delaying payment on various excuses, which resulted in a hike in export cost.
"As a result, many mills are losing out on competitive advantages over their competitors in other countries," he said and added that BB governor has assured them of addressing the problem as soon as possible.
According to the BTMA, the country has around 1300 textile mills with cumulative investment of Tk40,000 crore ( Tk400 billion) --- the biggest by an industrial sector.
But Sarker said many of these factories have not implemented waste treatment plant due to the exorbitant cost of the machinery.
Bangladesh Bank has recently offered Tk10 million credit at an interest rate of nine per cent for the factories planning to install effluent treatment plant.
Sarker said the BB should raise the lending cap to Tk 30 million as the cost of ETP is very high in international market.
The textile mills association urged the governor to bring down lending rate to a single digit, saying the decline would inject new momentum in the country's dismal investment scenario.
Sarker said they demanded narrowing the lending gap between the government and non-government banks in an effort to bring competitive environment in the country's banking system.
The BTMA in its proposal also urged the governor to make the textile spinning and dyeing-printing-finishing factories eligible for the export development fund (EDF) of the central bank.