The Bangladesh government has decided to allow jute millers for enjoying the block account facility against their outstanding loans, with a view to giving a boost to export earnings by the sector.
Jute millers urged the Bangladesh government to provide the jute sector with block account facilities for outstanding bank loans for the development of the sector in last year. In response, the government has offered a stimulus package, considering the sector’s present ailing condition.
The Financial Institution Division under the finance ministry has recently sent a letter to the Bangladesh bank to take necessary action.
According to the letter, outstanding loans, interests or profit until October 31, 2018, will have to be brought under the facility. In special cases, credit or part of the credit will be transferred to the block account system. The millers will have to pay back within 10 years where a beneficiary will enjoy a two-year grace period to repay the loans.
The millers and jute goods producers, especially the members of Bangladesh Jute Mills Corporation (BJMC), Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners Association (BJSA), will benefit from such block account, the central bank stated.
The ministry also suggested the Bangladesh Bank that if any clients turn into defaulters to pay four installments correspondingly, his or her block account facility will be canceled.
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Those who enjoyed the block account benefit earlier and their loans became classified will also have to be considered for this privilege afresh, the letter said. But the millers or producers who received loans from existing refinance scheme or special fund like packing cash credit will not be entitled to the facility.
The ministry suggested that a provision be made that existing lawsuits against defaulters will have to be settled through arbitration after introducing the block account system.
Jute and jute goods, the third largest export earners, registered a 16.28% negative growth to $289 million during the July-October period.
