Textile millers have sought the Bangladesh Bank's urgent intervention to recover $8.71 million in outstanding payments tied to more than 150 accepted and matured bills that have remained unpaid for an extended period.
According to central bank officials, the Bangladesh Textile Mills Association (BTMA) highlighted in a recent letter that the dues involve 22 primary textile mills supplying yarn and fabric to apparel exporters under back-to-back letters of credit (LCs).
Though deliveries are complete and maturity dates have elapsed, payments have not been credited to the mills' accounts, causing a severe liquidity crunch.
BTMA President Showkat Aziz Russell wrote to the central bank governor, emphasising that delays in settling matured bills had sharply constrained working capital, disrupted production, and undermined export-related activities.
In some cases, payments had been overdue for one to two years or even longer.
The association accused commercial banks of failing to credit export proceeds to the suppliers' accounts even after the bills matured.
This had exposed mills to prolonged cash flow pressures, exacerbating challenges already posed by high interest rates, rising energy and raw material costs, and global economic uncertainty, it said.
It also pointed to operational challenges in handling domestic LCs, particularly the requirement for bank officials to conduct on-site verification before acceptance - a process it described as impractical and a cause of unnecessary delays in confirming maturity dates and settling bills.
The letter noted that some mills' accepted or matured bills remained unsettled even after one to two years, severely restricting working capital and seriously disrupting production and exports.
Under circular 13/2021 of the central bank's Banking Regulation and Policy Department, the requirement for on-site verification of goods delivery by bank officials before acceptance had proven unrealistic and unworkable in practice, the BTMA said.
There was no known instance in Bangladesh of a bank official physically visiting a factory to sign documents, leading to undue delays in setting maturity dates and settling inland LCs, it said.
It suggested that instead of on-site inspections, acceptance and maturity dates be determined based on delivery challans signed by authorised officials of inland LC-issuing institutions.
Highlighting that banks primarily operate based on documents rather than physical verification, the BTMA urged amending the circular to recognise the delivery challan and bill of exchange dates as the maturity date - consistent with practices for foreign bills and LCs.
Citing international trade rules under UCP 600, the association stressed that payments against accepted or matured bills should be made within five working days of receiving documents.
It urged the Bangladesh Bank to issue mandatory instructions to all authorised dealer banks to ensure timely settlements.
The BTMA also called for reinstating the previous system under which the central bank would debit the specific bank's account and credit the customer's account if payment on a matured bill was delayed.
It warned that failure to address the issue promptly could jeopardise production continuity in the primary textile sector and weaken its vital role in supporting Bangladesh's export-oriented apparel industry.
Regarding complaint handling, it said customers should have full access to the Bangladesh Bank's portal to lodge complaints, with effective follow-up mechanisms to ensure timely resolution.
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