The government has allowed apparel exporters to receive cash incentive against export proceeds received in advance through telegraphic transfer (TT) to help recover their loss due to the ongoing political turmoil.
Under the new facility, the exporters of woven, knitwear and terry-towels have been allowed to get cash incentive at the existing level of 5.0 per cent against advance TT, an electronic fund transfer system, before shipment of their goods.
"The apparel exporters will get such incentive after fulfilling conditions, including names of beneficiary of the export earnings, mentioned in inland back-to-back letter of credit (LC)," a senior official of the Bangladesh Bank (BB) explained.
He also said the central bank issued a circular in this connection Wednesday, and asked the commercial banks to follow the latest instructions relating to providing cash incentive against advance TT for apparel and clothing sector.
The announcement came, as apparel sector, which accounts for about 80 per cent of the country's total export, has been under tremendous pressure since October last year, following frequent spells of blockade and shutdown, enforced by the main opposition party.
"The banks have to be ensured about the authenticity of importers and prices of exportable goods," the BB official said.
As part of the conditions, the trade promotion bodies concerned will have to certify that the exporter will supply products at fair value with reasonable quantity.
Besides, the trade promotion bodies will have to certify the authenticity of the importer, according to the BB official.
"We've issued the directive in line with the Ministry of Finance (MoF) advice," another central banker said.
The MoF has taken the latest move following discussion on the issue at a meeting between Finance Minister Abul Maal Abdul Muhith and the leaders of apparel and clothing sector trade-bodies in December.
Earlier on March 5 last year, the finance minister assured the leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA) and Cotton Importers Association of taking necessary measures for allowing cash incentive against advance TT.
The country's apparel exporters welcomed the latest move, saying that it will help explore new destinations for their products.
"We're seeking such facility from the government for a long time," Mohammad Hatem, vice president of the BKMEA, told the FE.
He also said it will help create a positive impact on the country's overall export earnings in the near future.
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