The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the central bank to take urgent measures to address the ongoing multifaceted crisis facing the country’s readymade garment (RMG) industry.
The call came during a meeting between a BGMEA delegation and Bangladesh Bank Governor Md Mostakur Rahman at the central bank headquarters on Wednesday.
The delegation, led by BGMEA President Mahmud Hasan Khan, also placed several specific recommendations to help stabilise the sector.
According to officials, the governor assured the delegation that the central bank would take prompt action on issues within its jurisdiction.
He also pledged that exporters would receive cash incentives regularly, saying that applications for such support would no longer remain pending and that payments would be released within the same month.
During the meeting, BGMEA leaders said the garment industry is going through a difficult period due to global economic uncertainty and domestic constraints.
They noted that although many banks have rescheduled loans, they are not providing the necessary working capital, making it difficult for factories to continue operations and repay loans on time.
The BGMEA leaders also called for increasing cash incentives for exporters as part of policy support to help sustain the industry and encourage new entrepreneurs.
They proposed raising the special cash incentive rate from 0.30 percent to 1 percent. They also suggested increasing the alternative cash incentive in place of bonded warehouse and duty drawback facilities from 1.5 percent to 2 percent.
For small and medium enterprises (SMEs), they recommended increasing the incentive rate from 3 percent to 4 percent.
BGMEA leaders warned that if incentive payments are not released quickly and regularly, many factories could be forced to shut down, which would have a negative impact on employment in the sector.
The delegation also proposed reducing the interest rate on packing credit to 7 percent and increasing the pre-shipment credit refinance scheme from Tk 50 billion to Tk 100 billion, with its tenure extended until 2030.
They also called for bringing export loan interest rates to single digits and ensuring easier loan conditions for SME enterprises.
During the meeting, the BGMEA leaders raised concerns about difficulties in encashing fixed deposits and export proceeds held in several Islamic banks, including former Exim Bank and First Security Islami Bank, citing liquidity shortages.
They said many factories are struggling to pay workers’ wages and utility bills due to the situation.
In response, the governor assured the delegation that the central bank would closely monitor the matter and take steps to address the liquidity issues.
BGMEA leaders expressed hope that the central bank’s prompt actions would help the garment sector overcome current global challenges, maintain production and protect employment in the country’s largest export industry.