The country鈥檚 primary textile millers on Tuesday demanded intervention from the Bangladesh Bank to realise their matured bills from commercial banks against the supply of yarn and fabric to the readymade garment industries through back-to-back letters of credit.
At a meeting with the BB governor Ahsan H Mansur, held at the central bank, the leaders of Bangladesh Textile Mills Association claimed that their mills were facing severe liquidity crisis as matured bills worth $270 million remained outstanding in different commercial banks.
In some cases, despite over two years having passed since the bills matured, the banks have yet to settle the payments, they said during the meeting.
鈥楤TMA member mills have fulfilled orders as required under back-to-back LCs; however, some commercial banks are failing to make payments at maturity, even after the counterparties have accepted the bills,鈥� the association president Showkat Aziz Russell informed BB governor during the meeting.
He said that this has created a challenging situation, leaving the mills struggling to carry out their regular operations, particularly in repaying their loans.
BTMA also said that commercial banks, including state banks, were not accepting partial adjustments or advance payments for export development fund loans causing delays in timely repayments.
The trade body sought instructions from central bank so that commercial banks accept partial adjustment for EDF loans.
According to the meeting sources, BB government assured the businesses that he would take necessary initiative to make payment of matured bills against the supply of yarn and fabric to the RMG factories through back-to-back LCs.聽
Mansur also assured that BB would consider the acceptance of partial adjustment for EDF loans.
During the meeting, BTMA urged Bangladesh Bank to halt the implementation of a recent circular that said聽 if any installment of a term loan is not paid within the stipulated period, the loan will be considered overdue three months after the due date, and all loans must be cleared by 31 March 2025 to avoid becoming overdue.
The trade body demanded to set a time limit of 6 months for the repayment of all loans until the supply of gas and electricity is normal.
Due to the Ukraine-Russia and Israel-Palestine wars, a 250 per cent surge in gas prices, a 70 per cent increase in workers鈥� wages, recent political unrest, worker dissatisfaction and inadequate gas and electricity supplies, 50鈥�60 per cent of production capacity remained unutilized in many export-oriented textile mills, BTMA leaders said.
鈥業t has now become impossible for industries in the export-oriented primary textile sector to meet term loan repayment obligations under the provisions of the circular,鈥� they said.
BTMA vice president Md Abul Kalam and former president Mohammad Ali Khokon, among others, present at the meeting.
