The government has decided to allow jute millers for enjoying the block account facility against their outstanding loans, considering the sector's present ailing condition.
The Financial Institution Division under the finance ministry sent a letter to the central bank last Thursday to take necessary action.
According to the letter, outstanding loans, interests or profit until October 31, 2018 will have to be brought under the facility.
In special cases, credit or part of the credit will be transferred to the block account system.
The loan will have to be paid within 10 years where a beneficiary will enjoy a two-year moratorium facility.
The rate of interest on the transferred fund will have to be fixed based the cost of fund.
The millers and jute goods producers, especially the members of Bangladesh Jute Mills Corporation (BJMC), Bangladesh Jute Mills Association (BJMA) and Bangladesh Jute Spinners Association (BJSA), will benefit from such block account.
Earlier, the government provided same facility to the raw jute exporters.
The ministry also suggested the Bangladesh Bank that if any beneficiary fails to pay four installments correspondingly, his or her block account facility will be cancelled.
Those who enjoyed the block account benefit earlier and their loans became classified will also have to be considered for this privilege afresh, the letter said.
But the millers or producers who received loans from existing refinance scheme or special fund like packing cash credit will not be entitled to the facility.
The ministry suggested that a provision be made that existing lawsuits against defaulters will have to be settled through arbitration after introducing the block account system.
Following repeated appeals from the BJMC and the BJMA, insiders have said, the government has made such a decision.
"We requested jute ministry several times to provide the block account facility," said Abdul Barik Khan, secretary at the BJMA.
They hailed the government's decision, he added.
A total of 170 jute mills are operated under the BJMA, 94 under the BJSA and 23 under the BJMC.
The latest Export Promotion Bureau data showed the export earnings from jute and jute goods declined by more than 16 per cent in the July-October period of the current fiscal year.
