The Bangladesh Bank once again asked the banks to provide jute sector businesses with moratorium facility for partial or total amount of their outstanding loans as its previous instruction remained mostly unimplemented.
The central bank came up with the fresh instruction on May 2.
On November 29, 2018, the Financial Institution Division of finance ministry instructed the central bank to provide the moratorium facility to the jute sector businesses to support them.
Under the facility, working capital loans along with interests were supposed to be transferred to a block account for two years and the loans have to be cleared within 10 years.
Responding to appeals from Bangladesh Jute Mills Corporation, Bangladesh Jute Mills Association and Bangladesh Jute Spinners Association the government had provided the facility. They made appeal amid slowdown export of jute and jute goods, sector people said.
There were allegations that banks did not implement the government instruction duly, said the central bank circular and asked all the scheduled banks implementing the instruction accordingly.
The banks were also asked to submit June-end progress report to the central bank with subsequent one month.
The fresh instruction followed prime minister Sheikh Hasina’s directive to take effective steps for making the jute sector profitable to sustain the industry. She made gave the directive at the inaugural function of National Jute Day 2019 and Diversified Jute Products Fair at Bangabandhu International Conference Centre in Dhaka on May 6. ‘Jute is such a product that produces no waste. It should not have to count losses. Attention will have to be given to make the industry profitable,’ she had said.
As per the government’s instruction issued in November 2018, outstanding loans and interests till October 31, 2018 must be brought under the moratorium facility and the rate of interest on the transferred fund was supposed to be set based on the cost of fund.