A delegation from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) met with the Governor of Bangladesh Bank, Md. Mostaqur Rahman, at his office today (Wednesday) to exchange of views on the current challenges facing the ready-made garment (RMG) industry.
Led by BGMEA President Mahmud Hasan Khan, the delegation sought urgent intervention from the central bank to help address the multifaceted crisis currently affecting the sector. During the meeting, the delegation presented several specific recommendations aimed at supporting the sustainability and competitiveness of the industry.
Other members of the delegation included BGMEA Director Majumdar Arifur Rahman, Director Dr. Rashid Ahamed Hossaini, and Managing Director of Mahin Apparels Limited Abdullah-Al-Mahmud Mahin. Senior officials from Bangladesh Bank were also present at the meeting.
During the discussion, BGMEA President Mahmud Hasan Khan said the country’s garment industry is currently passing through a difficult phase due to global economic instability and various domestic constraints. Although many banks have rescheduled loans, he noted that the required working capital support is not being provided, which is creating significant obstacles in maintaining factory operations and ensuring timely repayment of loans.
BGMEA leaders strongly urged the continuation of policy support and increase in incentives to safeguard the industry and encourage new entrepreneurship during the ongoing crisis. The delegation proposed increasing the special cash incentive rate from 0.30% to 1%, raising the alternative cash incentive (in lieu of bonded facilities and duty drawback) from 1.5% to 2%, and increasing the cash incentive for small and medium enterprises (SMEs) from 3% to 4%.
They emphasized that timely and regular disbursement of incentive funds is critical, saying that delays could force many factories to shut down, which would have serious repercussions for the labor market.
The delegation also recommended reducing the interest rate on Packing Credit (PC) to 7%, increasing the Pre-Shipment Credit Refinance Scheme from BDT 5,000 crore to BDT 10,000 crore, and extending the tenure of the scheme until 2030. Additionally, they proposed bringing export loan interest rates to single digits and ensuring easier access to loans for SME enterprises.
After carefully listening to the concerns and proposals presented by the BGMEA delegation, Bangladesh Bank Governor Md. Mostaqur Rahman assured that swift and effective measures would be taken on issues within the jurisdiction of the central bank.
Regarding cash incentives, the Governor firmly stated that no applications will remain pending going forward. To help address exporters’ liquidity challenges, arrangements will be made to ensure that monthly cash incentives are released within the same month.
During the meeting, the delegation also raised the issue of exporters being unable to encash fixed deposits and export proceeds held in several consolidated Islamic banks, including former EXIM Bank, First Security Islami Bank, and others. They noted that the ongoing liquidity crisis has made it difficult for many factories to pay workers’ wages, allowances, and electricity bills.
In response, the Governor assured that Bangladesh Bank will maintain special monitoring and supervision to help resolve these issues.
The BGMEA delegation expressed hope that the prompt initiatives taken by the central bank will help the garment industry overcome current global challenges, regain stability, and continue to sustain employment for millions of workers.
