The commerce ministry has endorsed the apparel makers' plea to exempt all bank liabilities of 133 sick readymade garment (RMG) factories in phases, people familiar with the development said.
In a letter to finance division on January 06, the commerce ministry called for writing off of loans, including interest and other costs of fund charges amounting to over Tk 6.86 billion of the sick units.
It also suggested the division refrain from issuing any warrant against the companies until it settles the issue.
The commerce ministry's push came following the decision of an inter-ministerial committee comprising officials from the finance ministry, Bangladesh Bank and the BGMEA and the BKMEA to assess the possibility of liquidation of the factories.
The inter-ministerial committee was formed against the backdrop of the BGMEA's appeal to the government demanding waiver of interest and loan write-off facilities for the 133 sick RMG factories.
The committee asked the factory representatives to explain as to why the mills failed to avail the benefits under which the government waived interest and loan write-off facilities for a total of 279 factories.
The absence of sufficient work orders due to economic meltdown, and retailers' bankruptcy, followed by failure to make timely shipment mainly because of political turmoil were identified as their failure to avail the benefits, the committee was informed.
The committee also investigated the scopes as to whether they could exit from the business and come up with the recommendations in its second meeting held on December 20 last.
The representative from the central bank informed the committee that the government needed to pay over Tk 6.86 billion to write off the debt of the sick industries, which also included Tk 5.52 billion in principal amount, Tk 1.47 billion in interest and Tk 35.7 million as case charges.
The committee did not find the details of two factories.
Earlier, in November last year, the BGMEA had requested the commerce ministry to take required measures to resolve the issue.
In the letter, it urged the government to waive all bank liabilities, including principal loan amount, interests and expenditure against cases of some 133 sick RMG factories.
The BGMEA slashed the number of sick industries to 133 through its investigation from the previously identified 279, industry people said.
Between 1985 and 2005, a good number of factories became sick or were closed due to unavoidable circumstances such as political turmoil, continuous hartal, flood and other natural calamities, non-cooperation from banks, and buyers' unethical practices, they said.
munni_fe@yahoo.com