Bangladesh

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Workers’ Wage

Government to extend RMG loan repayment grace period by 6 months

Staff Correspondent | Published: 00:55, Feb 23,2021

 
 

The government has decided to extend the grace period by six months for Tk 10,500 crore loans taken by readymade garment exporters at a subsidized service rate for paying workers’ wages in the past year amid the COVID-19 outbreak.

The government is not going to entertain another demand of RMG exporters for extending the overall repayment period by one more year, said finance ministry officials on Monday.

Now, RMG exporters will have to pay back the loans in 30 months, including six months as grace, instead of 24 months.

The Bangladesh Bank would soon bring about changes to the stimulus package under which RMG exporters were facilitated the loans to pay workers’ wages and tackle COVID-19-induced economic fallouts.

In October 2020, apparel exporters demanded that they should be given five years in place of two years to pay back the loans.

After they had been rejected, RMG exporters placed fresh demands for extending the moratorium on the wage-stimulus package by six more months and the repayment tenure by one year in January, one month before the completion of the six-month grace period.

According to finance ministry officials, interest-free loans of about Tk 5,000 crore were allocated for the export sector with a service charge of 2 per cent initially. 

Over 1,900 export-oriented industries borrowed from commercial banks in April-May 2020 to pay wages of their employees under the stimulus package.

In view of the demand of the export sector, the allocation for them was increased twice to pay wages for the months of June and July in 2020.

The total support for this sector now stands at Tk 10,500 crore.

On February 17, at a panel introducing ceremony of the Sammilito Parishad, a faction of the Bangladesh Garment Manufacturers and Exporters Association which will participate in the upcoming BGMEA elections, commerce minister Tipu Munshi hoped that the government was likely to extend the tenure of the repayment of the loans.  

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