The Bangladesh Textiles Mills Association (BTMA) has written to the Governor of the country’s central bank, Bangladesh Bank (BB), Fazle Kabir, stating local yarn and fabric manufacturers have had to incur financial losses due to unusual delays made by the banks in paying buyers on what they termed the ‘premise of lame excuses’, and called upon the BB Governor to intervene and resolve the issue, as per media reports.
The BTMA move follows on the back of allegations that banks were holding up payments to local textile manufacturers against purchase of raw materials by apparel makers under back-to-back letters of credit.
Underlining that the spinning, weaving and dying mills had been working as deemed exporters through supplying yarns and fabrics to the garment manufacturers, the BTMA letter, reportedly, stated that even if the garment manufacturers were procuring fabrics and yarns from both external and local sources under back-to-back letters of credit, banks have allegedly been deferring payments to the local suppliers for five to six months even if they are making payments to foreign suppliers just after submission of the Bill of Lading as per the conditions of LCs.
