Bangladesh Bank Governor Md Mostaqur Rahman has assured garment exporters that government cash incentive payments for the export sector will no longer remain pending, in a move aimed at easing liquidity pressures on manufacturers.
The assurance was given during a meeting with leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), led by its president Mahmud Hasan Khan Babu, according to a statement released by the industry body.
During the meeting, Rahman said the central bank would ensure that applications for export cash incentives were processed without delay. He indicated that payments would be released within the same month in order to help exporters manage cash flow more effectively.
Industry representatives raised concerns about liquidity shortages affecting garment factories, particularly due to difficulties in encashing fixed deposits and export proceeds held in financially troubled banks. These include institutions such as the former EXIM Bank and First Security Islami Bank, which have since been merged into Islami Bank.
According to exporters, the situation has created significant financial strain for many factories, leaving some struggling to meet operational expenses such as workers’ wages and electricity bills.
The governor assured industry leaders that Bangladesh Bank would closely monitor the issue and take appropriate steps where it had jurisdiction to resolve the problems.
BGMEA representatives also proposed revisions to existing incentive schemes. They suggested increasing the special cash incentive rate from 0.30% to 1%, raising the alternative incentive rate from 1.5% to 2%, and increasing incentives for small and medium-sized enterprises from 3% to 4%.
In addition, the industry body called for measures to improve access to financing for exporters. Among the proposals discussed were reducing the interest rate on packing credit to 7%, expanding the pre-shipment credit refinance scheme from Taka 5,000 crore to Taka 10,000 crore, and extending the scheme’s duration until 2030.
Exporters also recommended bringing export loan interest rates down to single digits and making it easier for small and medium-sized enterprises to access credit.
Industry leaders warned that delays in releasing cash incentives could lead to severe consequences for the sector, including factory closures and negative effects on employment in Bangladesh’s labour-intensive garment industry.
Senior officials from Bangladesh Bank and leaders from BGMEA attended the meeting, which focused on addressing financial challenges facing the country’s crucial ready-made garment export sector.
