Garment makers yesterday demanded to exclude the apparel sector from the central bank's new rules for loan classification, rescheduling and provisioning, as the country's highest foreign currency earning sector is passing through a critical time.

Bangladesh Bank issued two circulars on the rules of loan classification, rescheduling and provisioning on June 14, saying that an ongoing loan operation will be classified for non-repayment of any instalment within three months, instead of the six-month duration now in effect.

Term loans of five years have also been brought under the new regulation.

Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA) spoke at a joint press briefing at the BGMEA office in the capital.

BGMEA President Shafiul Islam Mohiuddin said it normally takes 120 days for repatriation of money from the exported goods, but the banking regulator reduced the period of Special Mention Account (SMA) to 60 days from 90 days.

“So, transferring the continuous loan and demand loan to SMA within 60 days is not logical,” he said.

He said the number of loan classified factories will increase with the move and banks will not be interested to give more loans to garment factories.

“The move will ultimately hamper investment flow in the private sector,” he said. He also indicated the low import of capital m

The Daily Star/Bangladesh/ 28th June 2012