The central bank has asked the scheduled banks to take necessary steps regarding the transfer of outstanding loans in the jute industry to block account system.
The Bangladesh Bank (BB) issued a circular to this end on Monday as per the decision of the finance ministry.
On Thursday, the Financial Institution Division under the Ministry of Finance sent a letter asking the central bank to take steps about block account facility for jute goods producers and millers.
The letter mentioned an eight-point decision of the finance ministry. As per the decision, outstanding loans, interests or profit until October 31, 2018, will have to be brought under the facility.
In special cases, credit or part of the credit will be transferred to the block account system.
The loans will have to be paid within 10 years and a beneficiary will enjoy a two-year moratorium facility.
The rate of interest on the transferred fund will have to be fixed on the basis of the cost of fund.
The millers and jute goods makers, especially the members of the Bangladesh Jute Mills Corporation (BJMC), the Bangladesh Jute Mills Association (BJMA) and the Bangladesh Jute Spinners Association (BJSA), will benefit from such block account facility.
Earlier, the government provided the same facility for raw jute exporters.
The ministry also suggested that if any beneficiary fails to pay four instalments correspondingly, his or her block account facility would be cancelled.
A total of 170 jute mills are operated under the BJMA, 94 under the BJSA and 23 under the BJMC.
The latest Export Promotion Bureau data showed that export earnings from jute and jute goods declined by more than 16 per cent in the July-October period of the current fiscal year.
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