Banks start disbursing loans to pay over 26 lakh export sector workers

Banks on Sunday started disbursing loans from the government-announced Tk5,000 crore stimulus package to export-oriented factories so that the owners could pay the wages of over 26 lakh workers.

Bankers said they began disbursing the salaries after receiving funds from the central bank last week.

"We started paying on the day [of receiving the funds] through bank accounts and mobile financial service (MFS) accounts of the workers as per the instruction of the government," said Trust Bank Managing Director Faruq Mainuddin.

Before disbursement, the banks had to verify the accounts submitted by the business entities, he added.

"Trust Bank has received around Tk39 crore from the central bank for paying salaries of around 37,000 workers employed in 31 entities for the month of April," Mainuddin said.

As per the revised decision of the government, those who worked in April would get full salary, while workers who did not would get 60 percent of their salaries.

The Bangladesh Bank has already released Tk2,000 crore to banks from the Tk5,000 crore stimulus package, according to central bank officials.

"The central bank released the amount in favour of 38 banks, against their demand for Tk2,566.19 crore," said Bangladesh Bank Executive Director and Spokesperson Md Serajul Islam.

He added that the central bank had applied to the finance ministry to get the remaining amount.

Of the Tk2,566.19 crore, EXIM Bank sought Tk540 crore for 122 entities, while Southeast Bank Tk480 crore for 150 entities.

Export-oriented businesses had previously been asked to submit loan applications to their respective banks within May 2 to avail the benefits of the stimulus package.

The Tk5,000 crore fund would be utilised for the disbursement of wages for three months from April to June, according to central bank guidelines.
Around 26 lakh MFS accounts have been created since April 4 for RMG workers.

As per the guidelines, companies availing loans under the package will have to pay back the sum within two years, or else they will be considered as defaulters.

The interest-free loan, which will be used to pay wages to employees of industrial units, will carry a two percent service charge and has a repayment period of two years, including a grace period of six months.

Meanwhile, a Bangladesh Bank circular issued on Sunday instructed the export-oriented entities to adjust in 10 days of each quarter the loan amount if the outstanding amount crossed the stipulated limit due to the imposition of interest.

Banks were also asked to take assistance from the Federation of Bangladesh Chambers of Commerce and Industries and its associated trade bodies for loan disbursement and recovery.