BGMEA urges govtExempt Tk 2.38b loan of 133 sick RMG units

FT ONLINE

The apex apparel trade-body - BGMEA - has urged the government for exemption of loan amounting to Tk 2.38 billion of some 133 sick ready-made garment (RMG) factories to help them survive, sources said.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has also slashed down the number of sick industries to 133 through its investigation from the previously identified 279, they also said.

The Ministry of Commerce has also endorsed these 133 units.

The trade-body came up with the plea in a letter to Finance Minister A H M Mustafa Kamal last month to exempt all bank liabilities, including loan, interest and other cost of fund charges, of these 133 sick RMG industries.

BGMEA President Dr. Rubana Huq in the letter sought writing off the debt worth Tk 2.38 billion, all interest, and cost of fund charges for the 133 sick RMG factories, taking them into special consideration.

She also mentioned that these units were also recognized in the government's official gazette and declared sick in the budget for the fiscal year 2013-14.

She also requested for cancelation or renewal of their licences after exempting all the demands of tax and customs departments.

Out of the 133 sick industries, some 90 factories have total outstanding loans and interest amounting to Tk 4.58 billion with public banks against their principal loan amount of Tk 1.57 billion, according to the letter.

The rest 37 sick industries borrowed a total of Tk 816.6 million from private commercial banks, which stood at Tk 1.91 billion including interest, it said.

A good number of factories became sick or were closed due to various unavoidable circumstances, like - political turmoil, continuous hartal, flood and other natural calamities, non-cooperation of banks, and buyers' unethical practices etc, industry people said.

The BGMEA earlier made a list of 279 such sick factories, which were inspected by the Ministry of Commerce. Later, the Ministry of Finance scrutinized the list and recognized the 133 units as sick industries through a gazette notification, they added.

The government in the fiscal year 2009-10 promised required budgetary supports for the units so that they can survive and return to business.