Apparel makers asked to report to BB about non-repatriated export proceeds
The apparel apex body has asked all its members to report to the central bank by the end of this month their non-repatriated export proceeds up to 10 per cent.
The Bangladesh Garment
Manufacturers and Exporters Association (BGMEA) communicated with the members
through issuing a letter on March 16, calling for taking the move through their
respective lien banks by March 30, 2021.
The information should be on the
goods shipped since December 2019 to February last.
It is expected to help the
factories clean their respective status in the online system of reporting EXP
and continue to get various export facilities, despite having huge amount of
unrealised payments due to the Covid-19 pandemic, industry insiders have said.
The Bangladesh Bank uses the
online system to track down whether the export proceeds are repatriated or not
and accordingly allow the factories to enjoy the existing export facilities.
Amid the pandemic, Bangladesh
Bank had earlier decided that the cases of unrealised export proceeds up to 10
per cent would be accommodated on the on-line system up to March 31 without
approval from the BB's discount committee, the exporters said.
The cases of discount above the
threshold would, however, require approval from the committee.
Usually, the exporters have to
get approval from the committee in cases of partially non-repatriated export
proceeds.
The move came against the
backdrop of apparel makers' sufferings from the heavy cuts on the bills by
their buyers, who were
reportedly facing fund flow
crisis due to the pandemic.
"In many cases, the entire
export proceeds have not repatriated as global readymade garment (RMG) buyers
are also financially affected due to the Covid-induced disruptions," the
BGMEA said in its letter to the members.
In the recent months, the
exporters claimed, such cases of non-repatriated export proceeds has gone up
due to the pandemic as the exporters were facing frequent discounts on their
bills.
When contacted, BGMEA president
Dr Rubana Huq said the buyers were asking for discounts ranging from 15 per
cent to 50 per cent.
Mohammed Hatem, senior vice
president of Bangladesh Knitwear Manufacturers and Exporters Association
(BKMEA), informed the FE that there were 1,042 cases of discount up to 10 per
cent.
The factories involved would not
be allowed to run their businesses after March 31 as the online reporting
system would show their EXP unrealized due to absence of approval from the
discount committee, he explained.
He said that the exporters on
March 15 held a meeting with the BB discount committee and requested to approve
the cases timely.
"The BB has decided to
approve the cases on valid ground and so, we've requested our members to submit
the information on discount by March 31 to continue their business," he
added.
If the BB system marks any
factory red for non-repatriation of the export proceeds, the banks would not
finance it and it would not be allowed to open letter of credits, Mr. Hatem
said.
Meanwhile, the BGMEA in another
letter to the National Board of Revenue on March 04 last requested not to put
pressure on an export-oriented garment factory for its unrealised export
proceeds.
The factory's buyer, JC Penny,
has declared itself bankrupt due to the pandemic and a total of US$ 1,433,715
against 25 of the factory's EXPs have not been repatriated, according to the
letter signed by the BGMEA president.
The factory has opened letter of
credit through its lien bank and its EXPs would be overdue by March 31 next,
the letter reads.
The BGMEA requested the NBR to
take necessary measures so that the factory gets continued banking supports and
cash incentive from the EDF and extension of the duration for its 25 EXPs till
December 31 next.
The BGMEA letter said many
global buyers have become financially insolvent since the outbreak of
coronavirus in major importing countries especially in the EU, China and US.
Since the second wave of the
virus outbreak, many buyers have suspended their existing work orders and
deferred the current shipments.
In such a situation, it is also
apprehended that the exporters might have to wait for several more months to
get their payments against the already shipped goods.
Source: Fianancial Express