Govt releases Tk2,000 crore for cash incentives to export industries
Banks have been asked not to adjust loans with cash incentives
The government has disbursed Tk2,000 crore in cash incentives for export-oriented industries to support workers' monthly wages and bonus payments ahead of Eid-ul-Fitr, according to sources.
Of this, Tk1,000 crore was released today (13 March), and the rest was disbursed on 5 March.
The Finance Division move follows an appeal from Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem earlier in this month to ensure timely payments to workers before Eid vacations.
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The government has also directed banks not to adjust previous loan repayments with these funds, as this incentive is specifically to address the current wage payment situation for the industry workers.
This decision follows three separate meetings held at the Chief Adviser's Office and the Secretariat.
A senior official of the Labour Ministry, speaking on condition of anonymity, said, "The meetings decided to ask banks not to adjust loans with the cash incentives. This time, the first priority will be to pay employees' wages, and only then can loans be adjusted."
The cash incentives represent the third and fourth installments of the export incentive allocated for the current financial year, 2024-25, for export sectors.
The Office of the Controller General of Accounts will soon announce the debit authority regarding the issue, and the Bangladesh Bank will provide the incentives as per the demands of the respective banks to facilitate payments to the concerned exporters.
Speaking to The Business Standard, BKMEA President Mohammad Hatem said, "Today, we [BGMEA and BKMEA] had a meeting at the Ministry of Labour and Employment at the Secretariat, where representatives from the Bangladesh Bank, the finance ministry, the Finance Division, the labour ministry, the Department of Inspection for Factories and Establishments, and various banks were also present. The meeting requested the banks not to adjust loans with these cash incentives."
He also mentioned that association leaders have requested the government to release an additional Tk2,000 crore before the Eid vacation.
According to meeting sources, around 20 garment factories remain highly vulnerable to potential unrest ahead of the Eid vacation. Factory owners have also been asked to submit their export documents so that the government may consider directing banks to release some funds in advance for paying workers' wages and Eid bonuses.
This month, factories are required to pay last month's wages, Eid bonuses, and half of March's wages to workers.
Notably, the commerce ministry, in a recent report, flagged about 500 RMG factories as at risk of unrest over the payment of wages and festival allowances ahead of Eid-ul-Fitr.
The assessment also identified 36 factories as particularly vulnerable and potentially in need of financial support to ensure timely payments before the holidays.
On 4 March, the BKMEA, in a letter, had requested the Finance Division to release Tk7,000 crore in outstanding cash assistance for exports before Eid-ul-Fitr.
The letter urged the Finance Division to take special measures to release the funds within the shortest possible time, preferably by the 15th of Ramadan, noting that delays could cause serious disruptions in the export sector.
The letter also highlighted the increasing pressure of salary and Eid bonus payments, warning that failure to meet these obligations could lead to renewed labour unrest.
RMG workers block Dhaka-Tangail highway
Traffic on the Dhaka-Tangail highway was suspended for about half an hour today as RMG workers blocked the road demanding payment of their dues.
According to Nazrul Islam, officer-in-charge of Konabari Police Station, workers of Swadhin Garment initially demonstrated inside the factory before taking to the highway near Konabari flyover around 11am, halting traffic.
Upon receiving information, police rushed to the scene and assured the workers that their dues would be cleared. Following the assurance, the workers lifted the blockade at around 11:30am, restoring traffic movement.
