Textile manufacturers claimed that banks are delaying payments to them for raw material purchases made by ready-made garment exporters under consecutive letters of credit.
In an attempt to settle the matter, the Bangladesh Textiles Mills Association wrote to Bangladesh Bank governor Abdur Rouf Talukder, stating that despite banks issuing maturity dates against the money, a total of US $ 35.86 million of 52 textile mills remain outstanding.
In a letter, BTMA President Muhammad Ali Khokon stated that the peculiar bank delays in processing accepted bills had left the region’s fabric and yarn producers in a dire financial situation.
According to the BTMA leaders, the RMG exporters were purchasing yarns and fabrics under consecutive LCs from both domestic and foreign suppliers.
The banks made payments to foreign suppliers just after the submission of the bill of lading as per the conditions of LCs, but they were deferring payments to the local suppliers for six months to one year.
By providing yarns and textiles to the RMG exporters, the country’s spinning, weaving, and dying mills function as considered exporters.
The RMG exporters opened consecutive LCs after receiving the pro-forma invoice from the mills, and the mills used delivery challans and truck receipts to transport the materials to the corresponding factories.
According to a BTMA leader, the banks had the textile millers get the purchasers’ acceptance on the bill of exchange, even though they had already obtained the signatures of factory officials on the truck receipts and delivery challans. This was not necessary.
Even after fulfilling all requirements, the banks delayed payments over several excuses, including that export proceeds were not repatriated, export proceeds were repatriated partially, or that there was a lack of sufficient balance in the buyers’ accounts with the banks to pay the suppliers, he said.
