The extent of delay in export shipment has climbed by 23 per cent during the last three years, threatening the country's reputation, according to a survey.
The survey by Bangladesh Institute of Bank Management said late export shipment was 47 per cent in 2016, which reached 70 per cent in 2018.
However, nominated banks received non-compliance notices in 47 per cent cases for the delay in 2018, said the survey report titled "Trade Services Operations of Banks".
Experts said the non-compliance poses threat to the country's export sector.
They said it also increases cost of exports, risk of fraudulence while undermining reputation.
A team of bankers and academicians conducted the survey led by BIBM Director Prof Shah Md Ahsan Habib.
Outgoing president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md. Siddiqur Rahman dismissed the survey results.
He said such a huge number of delayed shipments are impossible.
"As president of the largest export trade body and as an exporter myself, I have never heard of such non-compliance in export LCs," he told FE.
President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md. Shafiul Islam (Mohiuddin) said if the data are true, the inefficiency of production, ports, banks and transport should be blamed.
He also said the country's export, especially in the readymade garment sector, is dependent on imported raw materials.
"So if the import is delayed, the export necessarily will be late," he said.
Talking to the Financial Express, Professor Ahsan Habib, who led the survey, said the compliance in 70 per cent late shipments in 2018 is a result of the sample survey and it is mostly in paper.
He said what happens in reality is that the extent of delayed shipment is a "mutual and unofficial agreement" between exporter and importer.
He also said it is nothing unusual-it happens everywhere.
However, the survey didn't explain why the extent of late shipment has been increasing over the last three years.
Talking to the FE, executive director of the Policy Research Institute Dr. Ahsan H Mansur said if the late shipment data are true, it is a compliance issue.
"The increase in extent of delay in export shipment will affect the country's export sector," he said.
He said the cost of export will increase for the delayed shipment and the reputation of exporters and banks will also be hurt.
In 2018, some 98 per cent import payments from Bangladesh were made through LC in terms of volume. It was more than 94 per cent in terms of number of cases.
This is in sharp contrast to the global practice in general, where 80 per cent payment transactions takes place through open account, a payment method which poses higher risk of money-laundering, according to the survey.
The survey recommended setting up a dedicated bench in court to resolve LC-related cases.
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