The owners of 31 private-sector textile mills have been given five to ten years to repay their debts to two state-owned banks and one financial institution as they reported sick, officials said. The Ministry of Finance (MoF) recently gave necessary directives to Agrani Bank, Bangladesh Development Bank Ltd and the Investment Corporation of Bangladesh (ICB) for the time extension following recommendations made by the Ministry of Textiles and Jute. Officials said these textile mills have been languishing for years failing to make good business. They failed to repay the loans and interests thereon for a long time being victims of global economic recession. The MoF directive said the repayment period for loans up to Tk 50 million will be five years while mills bearing a debt hangover above the Tk 50-million mark will get ten years’ time to pay back the borrowed money. One year moratorium will be applicable for both types. Mills having loans up to Tk 50 million will pay interest for four years while mills with loan over Tk 50 million have to pay interest for nine years. It said the mills will get full waiver for uncharged interest and interest of suspense account. And the cost of fund will be flexible. “The loan interests which are already calculated with the capital should not be debited by any means,” says the finance ministry directive, adding that the interest which is yet to be charged or calculated will be waived in favour of the customers. The MoF directive also says no portion of the principal and costs incurred due to a case filed in the court should be given waiver. Secretary-General of Bangladesh Textile Mills Association (BTMA), a platform of privately owned textile mills, Feroz Ahmed told the FE Monday that the organisation had recommended that the MoF favour the sick mills through granting interest waiver and other facilities. Welcoming the MoF decision he said some of the mills will get rehabilitation from this benefit extended by the government. Commenting on the state of the textile sector, Mr Ahmed said presently the industry is under pressure due to price slump of yarn and low price of exported goods, especially in eurozone. He said the demand for goods also decreased on the global market and it also affected production. “Many of the textile mill owners are even incurring loss due to the price fall of goods,” Mr Ahmed added. Another BTMA official said frequent fluctuations of cotton price put the industry in a quandary. Amid commodity price cuts on the global market and regular ups and downs in cotton prices, the millers experience dilemma over the question of big buy of cotton, which ultimately hampers production.
