Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Sunday demanded exemption from repayment of at least Tk 649 crore in principal amount of loans and interests for 133 ‘sick’ readymade garment factories.
BGMEA has also slashed down the number of sick industries to 133 through its investigation from the previously identified 279. The Ministry of Commerce has also endorsed these 133 units.
BGMEA President Dr Rubana Huq sought writing off the debt worth of Tk 238.49 crore, all interest, and cost of fund charges for the 133 sick RMG factories in a written letter at a meeting with finance minister AHM Mustafa Kamal at his office in Bangladesh secretariat in Dhaka.
She also mentioned that these units were also recognised in the government’s official gazette and declared sick in the budget for the fiscal year 2013-14.
Out of the 133 sick industries, some 90 factories have total outstanding loan and interest amounting to Tk 458 cr with public banks against their principal loan amount of Tk 157 cr, according to the letter. The rest 37 sick industries borrowed a total of Tk 816.6 million from private commercial banks, which stood at Tk 1.91 billion including interest, it mentioned.
BGMEA President also demanded payout of 1 percent special cash incentive without imposing any condition. In the budget for the this financial year 2019-20, the government announced 1 percent cash incentive for RMG exporters but Bangladesh Bank imposed some conditions to get the benefit.
Earlier, the BGMEA president placed before the finance minister a charter of demand that included waiver from repayment of loans for ‘sick’ industries and rescheduling facility for small and medium factories.
Rubana in written proposals requested the finance minister to allow facility to the factories to cancel or renew their licences with the waiver of all outstanding taxes.
At the meeting, Rubana also demanded compensation for the sector through additional provision of Tk 2-5 against each dollar on the value they retained and retrospective effect of 0.25 per cent source tax from July.
She urged the minister to set the maximum interest rate for packing credit and to allow higher advance payment for defined category.
The BGMEA also demanded special fund for innovation to ensure product diversification to remain competitive in the world market.