CAPITAL MACHINERY

RMG factory owners to enjoy 4-yr deferred LC payment

Staff Correspondent

Readymade garment factory owners are going to enjoy four-year deferred letter of credit payment facility in importing capital machinery and five-year repayment facilities for foreign loans in place of existing one year.
According to a recent decision of the Board of Investment and Bangladesh Bank, the garment manufacturers who want to get the opportunity of opening deferred LC for the period of three years more, will have to submit applications to the BoI.
The Bangladesh Garment Manufacturers and Exporters Association said the owners of readymade garment factories, who wanted to get the opportunity for more than one year in making their deferred payment on import of capital machinery, will have to submit application to Bangladesh Bank.
The retrospective payment will be approved by the Foreign Exchange Investment Department of Bangladesh Bank.
Following the decision of Bangladesh Bank and BoI, the BGMEA issued a notice to its members asking to apply to Bangladesh Bank and BoI for getting the opportunity of opening differed LC payment for four years.
‘Sellers or the exporters of the capital machinery are always ready to sell their machinery under the agreements of deferred payment for four years but importers could not enjoy the opportunity due to the BB provision of payments for 360 days,’ BGMEA vice-president Shahidullah Azim told New Age on Saturday.
He said that the recent decision of the BB and BoI would encourage entrepreneurs to invest more for the modernisation and expansion of their business as Bangladesh Bank confirmed that it would consider the issue of four-year deferred LC payment in importing capital machinery.
Mohammed Hatem, former vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, said following the confirmation, the entrepreneurs had started to submit the applications to the BoI for getting the opportunity of making deferred payment for four years.
He said the central bank also agreed to relax the existing provision for the repayment of foreign loans.
In its last board meeting, the central bank approved 32 applications giving opportunity of enjoying five years to make the repayment of foreign loans, Hatem said.
Like the demand of LC payment under deferred arrangement in four years, the five-year repayment facilities of foreign loans was also a long-standing demand of the garment manufacturers.

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