Major relaxations have been sought by Bangladesh’s primary textile sector in the Internal Credit Risk Rating (ICRR) system of the central bank (Bangladesh Bank), so as to enable mills that have failed to attain the marginal score, avail credit facilities.
According to media reports, the Bangladesh Textiles Mills Association (BTMA) last month wrote to the Governor of Bangladesh Bank, Fazle Kabir, seeking extension of time for attaining a marginal score of minimum 60 under the ICRR system till 30 December for private limited companies and till 30 June for listed companies even as the letter underlined that because of the losses caused by the earlier recession and the disruptions for the coronavirus, the financial statements of all the BTMA member mills were not healthy enough to secure the marginal score of 60 under the ICRR system of the central bank that resulted in no renewal of existing credit/working capital facilities and no fresh loans from banks.
The BTMA demanded that the requirement to attain a marginal score of 60 be relaxed to 40 for all BTMA member mills and other apparel makers even as it called upon the central bank to accept the unaudited half yearly accounts from public limited listed companies so that they can attain a marginal score of minimum 60 under its ICRR system.
In the BTMA letter to the BB, BTMA president Mohammad Ali Khokon, reportedly, underlined that the true intention of the Government’s stimulus package was to support the textile sector but he is afraid that many of the BTMA member mills may have to shut down operations soon because of the constraints (they are facing) towards securing a marginal score in line with the guidelines on the ICRR system and went on to add that the COVID-19 pandemic had disrupted the overall activities of the sector, including but not limited to sales, production, cash inflows and banking performance, consequent to which each member mill has suffered significant losses.
