Cash incentive payments will no longer be kept pending, governor tells garment exporters
The assurance came during a meeting today with leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), led by its president Mahmud Hasan Khan Babu
Bangladesh Bank's newly appointed governor Md Mostaqur Rahman has assured garment industry owners that government cash incentives for the export sector will no longer remain pending.
The assurance came during a meeting today with leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), led by its president Mahmud Hasan Khan Babu, according to a BGMEA press release.
Quoting the governor, the release said: "From now on, no applications for cash incentives will remain pending. To ease liquidity pressures on exporters, monthly cash incentive payments will be released within the same month."
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During the meeting, BGMEA leaders also raised concerns about their inability to encash fixed deposits and export proceeds held in problem banks – including the former EXIM Bank, First Security Islami Bank and others now merged into the consolidated Islami Bank.
They said this situation has created liquidity shortages, leaving many factories struggling to pay workers' wages and electricity bills.
The governor assured them that Bangladesh Bank would provide special monitoring to resolve the issue.
"Swift and effective measures will be taken on matters that fall under the jurisdiction of Bangladesh Bank," he said.
The new governor himself was previously involved in the garment business.
BGMEA leaders also called for an increase in cash incentive rates. The delegation proposed raising the special cash incentive rate from 0.30% to 1%, the alternative cash incentive rate from 1.5% to 2%, and the rate for small and medium enterprises (SMEs) from 3% to 4%.
They warned that if incentive payments are not released regularly and quickly, many factories could soon shut down, which would negatively affect the labour market.
The industry body also proposed reducing the interest rate on packing credit (PC) to 7%, increasing the size of the pre-shipment credit refinance scheme from Tk5,000 crore to Tk10,000 crore, and extending the scheme until 2030.
It also recommended bringing export loan interest rates down to single digits and providing easier access to credit for SME enterprises.
Senior BGMEA leaders and officials from Bangladesh Bank attended the meeting.
