Sick RMG factories

Finance ministry requested to liquidate 133 units

Staff Correspondent | Published: 22:15, Jan 14,2021

 
 

The commerce ministry has requested the finance ministry to liquidate 133 sick readymade garment factories.

Following a decision made by an inter-ministerial committee comprising of officials of the finance ministry, the Bangladesh Bank and the apparel sector to assess the possibility of liquidating the factories, the commerce ministry on January 6 sent a letter to the Finance Division of the finance ministry requesting the liquidation of the factories which have remained closed.

The commerce ministry also suggested not issuing any warrants against the companies until the finance division settles the issue.   

Earlier, the Bangladesh Garment Manufacturers and Exporters Association had repeatedly requested the commerce and finance ministries to exempt 133 sick RMG from repayment of at least Tk 700 crore in loan principals and interests.

Following the plea made by the BGMEA to the government to grant interest waivers and loan write-off facilities for the RMG factories, the commerce ministry formed the inter-ministerial committee to assess the possibility of liquidating the factories under a government facility offered in the budget for the fiscal year 20132014 as the process has remained pending for years.    

The committee asked the factory representatives to explain why the factories had failed to avail the benefits under which the government had waived interests and given loan write-off facilities to a total of 279 factories. 

In response to the queries made by the committee, the BGMEA informed that drop in export orders due to the global economic meltdown and disruption in shipping consignments due to the political instability in the country were the key reasons for failing to avail the benefits.      

According to the meeting minutes, the principal of the loans taken by the 131 RMG factories amounted to Tk 552.53 crore along with interests of Tk 147.05 crore.

Data on the status of the loans taken by the other two factories are yet to be collected.

The BB representative in the meeting said that as per the rules and regulations, the central bank could not provide exemptions from payment of the principal amount and interest, both imposed and not-imposed, and operating cost.

But it could do so upon the approval of the Finance Division, the BB representative said.

Considering the long standing sufferings of the factory owners, the last meeting of the inter-ministerial committee decided to recommend that the Finance Division should liquidate the 133 sick RMG factories gradually.    

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