The central bank warned Monday that it will not accept any indifferent attitude by private banks while accepting or buying 'inland bills' of the garment manufacturers or those supplying accessories to the country's export-oriented apparel industry. “No banks should avoid accepting or buying inland bill purchase (IBP) citing any excuse of Hall-Mark loan scam,” said Bangladesh Bank Deputy Governor SK Sur Chowdhury while briefing the journalists after a meeting with textile and apparel industry leaders.

“Most of the private banks have become more conscious after the Hall-Mark scam which prompted them to be choosier,” said the Deputy Governor, instructing the bank MDs who attended the meeting, to purchase the IBP as usual.

The central bank held a meeting with leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BMEA) and Bangladesh Textile Mills Association (BTMA) at its board room to resolve banking problems the industry is facing.

According to sources, the business of the supply chains of the major export sector, especially the garment (RMG) industry, has been highly affected because of the Hall-Mark loan scam as most of the commercial banks are reportedly reluctant to finance businesses through 'inland bills' in the recent days.

Bangladesh Bank in a circular on July 11 reduced the power of purchasing IBP by the branches of banks as the banking regulator detected irregularities in disbursement of loans against opening of letters of credit. The regulator had found a significant rise in collecting funds through preparing accommodation bills against LCs, without any real business transaction.

The trend of bill purchase increased as those transactions were handled at branch level, with the principal branch kept in the dark.

Therefore, the regulator asked the banks branches to take permission from their principal branch before purchasing such accommodation bills.

Bangladesh Bank Deputy Governor, however, assured the entrepreneurs that they will get all cooperation regarding IBP if the bills were genuine. “They will purchase bills as usual which they did earlier,” asserted the Deputy Governor.
Association of Bankers’ Bangladesh (ABB) president Nurul Amin, who attended the meeting, also assured that all the banks, including the Sonali Bank, would purchase IBP and there will be no problem. “Relations between banks and clients should not be hampered,” Amin said.

BGMEA president Shafiul Islam Mohiuddin said they were assured by Bangladesh Bank about IBP purchase adding that the central bank is now more vigilant and will monitor the issue more seriously.

“The IBP will be accepted on bank-client relationship basis. We brought the issues those were not being addressed by our banks to the Bangladesh Bank,” BGMEA president said.

The meeting was attended among others by BKMEA acting president Mohammad Hatem, BTMA president Jahangir Alamin and BGMEA vice president Siddiqur Rahman.

News: The Daily Independent/Bangladesh/16th-Oct-12