BB governor advises BKMEA to seek subsidy on loan interest
News Report

Bangladesh Bank Governor Dr Atiur Rahman on Sunday advised the apparel exporters to seek a fund allocation in the coming budget as subsidy for interest on bank loans by the entrepreneurs, reports UNB.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Haque said the Governor has suggested them to take up the issue with Finance Minister AMA Muhith when the trade body leaders called on the Governor at Bangladesh Bank.
"A portion of the interest on loans will be paid from the fund, if so created," he told reporters about the "unprecedented recommendation" after the meeting.
There is no instance in the country that the public exchequer shares a portion of the interest on bank loans. BKMEA president Fazlul Haque cited a reference that the Indian government share 4-5 percent of the interest in certain cases.
There is, however, an instance that the central bank here imposed a lending rate cut on the commercial banks to a maximum 13 percent and also insisting the banks to further reduce the lending rate to help industries face the challenges of recession.
The apparel exporters have long been demanding financial support from the government to help the industry survive from a possible setback due to the impact of global recession.
Their demand has been left out of the "Financial Stimulus Package" announced recently as the government considered the sector not affected yet to an extent deserving of such assistance.
According to latest official figures, knitwear exports registered over 21 percent growth to US$ 4.75 billion during the July-March period of the current fiscal year as compared to the same period last fiscal year while woven garments marked over 18 percent growth to US$4.46 billion.
Replying to a question, the BKMEA president, however, said the sector'' s growth slowed down substantially from an average 22 percent registered for last few years.
He informed that the knitwear sub-sector registered 54 percent growth in the first quarter of the current fiscal year while the growth came down to an average of 8 percent after the second and third quarters.
Fazlul Haque was asked whether the government should provide support to the already negative growth sectors or the sectors like RMG, which still has been registering growth despite the recession. In reply, he said that their losses due to the growth slowdown would be much higher than the sectors having negative growth with small export volume.
The BKMEA president said they sought from Bangladesh Bank an authority to certify any of their members, who will be eligible for rescheduling loans in accordance with the amnesty declared under the Financial Stimulus Package. They also sought an extension of the deadline to reschedule their loans from September 9 this year, he added.BKMEA''s other demands are making the 13 percent interest rate applicable on the existing loans too, reducing service charges of the commercial banks, and constituting a fund in the Bangladesh Bank to help set up Effluent Treatment Plant (ETP) in the apparel industry.
Bangladesh Bank executive director Khandakar Muzharul Haque said the Governor has instructed the central bank executives to look into the possibilities of creating ETP fund, if they have the mandate and no legal constraints.