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Proposal on loan facilities for jute sector under scrutiny

March 25, 2018 00:00:00

FE Report

The government is scrutinising a proposal sent by the jute ministry to provide the jute sector with block account facilities for outstanding bank loans for the development of the sector, officials said.

"We have asked the central bank to provide information on outstanding loan status of jute mills under Bangladesh Jute Mills Corporation (BJMC). The Bangladesh Bank has already sent the latest loan data on the BJMC mills. We are sincerely working on the issue," a high official of the financial institutions division told the FE.

In April last year, the ministry of textiles and jute (MoTJ) proposed providing the jute sector with loan facility for 25 years at a rate of 9-10 per cent interest with 10-year moratorium to repay the existing outstanding loans, he added.

The finance minister at an exchange of views meeting with raw jute exporters organised by Bangladesh Jute Association (BJA) in the city on March 17 said the government would provide jute exporters with block account facility.

Some 20 jute mills under BJMC owed Tk 7.53 billion to four state-owned banks -- Sonali, Janata, Agrani and Rupali-- as of March 2017, an official said.

BJMC incurred a loss of Tk 660 million in the fiscal year (FY) 2011-12 while Tk 3.84 billion in FY 2012-13, Tk 4.97 billion in FY 2013-14, Tk 7.26 billion in FY 2014-15 and Tk 5.88 billion in FY 2015-16, according to the Bangladesh Economic Review-2016.

The BJMC's loss has been ballooning for the last couple of years. The mills under BJMC are also incurring losses due to mismanagement and corruption and lack of proper plans and initiatives, industry insiders said.

It is gradually recovering losses after taking various initiatives in this regard, a senior BJMC official said.

The government has drawn up a work plan for five years from FY 2016-17 to FY 2020-21 to make the state-owned corporation self-reliant.

The government has provided the BJMC with over Tk 28.41 billion as financial assistance during the period between the fiscal year (FY) 2008-09 and FY 2016-17.

At present, BJMC is the biggest employer in the country's industrial sector. It provides direct jobs to nearly 70,000 workers as well as 5,500 officers and employees, supporting the livelihood of around 6.0 million farm families.

Now the state-run entity is operating 26 mills, including three non-jute industries. There are seven mills in Dhaka zone while ten in Chittagong and nine in Khulna.

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