CPD RMG Study Stitching a better future for Bangladesh
Published in the Financial Express on 5, June 2017
Eight garment owners have submitted applications to the participating financial institutions (PFIs), seeking low-cost fund under Urban Building Safety Project (UBSP) for improving their working conditions.
Public Works Department (PWD) under Ministry of Housing and Public Works is now assessing technical aspects of the applications, a senior official of Bangladesh Bank (BB) told the FE on Monday.
After assessing the applications PWD will send those back to the PFIs concerned with recommendations, according to the BB official.
A total of 25 banks and 10 non-banking financial institutions (NBFIs) signed participatory agreements with the central bank on February 13 to disburse funds under a project of Japan International Cooperation Agency (JICA).
BB provided training to 37 officials of the PFIs on Monday to perceive the project’s overall procedures.
BB deputy governor S K Sur Chowdhury was present at the inaugural session of the training programme as the chief guest. He advised the banks and NBFIs to come forward for financing the readymade garment (RMG) factories for remediation.
“The sustainability of this industry not only brings benefit to the RMG owners and workers, but also gives enormous opportunities of future business to our banking community. So, the bankers need to be more proactive for financing the garment owners under this project.”
He also said timely decision and investment for remediation measures will make the sector more vibrant, and also make local RMG products more attractive to international buyers.
Among others, Abdur Rahim, Executive Director of BB, Anis A Khan, Chairman of Association of Bankers, Bangladesh (ABB) and Managing Director (MD) & Chief Executive Officer (CEO) of Mutual Trust Bank Limited, and Swapan Kumar Roy, General Manager of SME & Special Programmes Department of BB, also spoke on the occasion.
The main objective of UBSP is to strengthen safety of RMG buildings through short to long-term financing for retrofitting, rebuilding, relocation, fire safety and working capital facilities.
The flagship project in the sector, worth Tk 2.68 billion, also helps in building a complete ecosystem of environment-friendly apparel factories by ensuring workers’ safety through improvement in working conditions.
Under UBSP, the owners of RMG factories in Dhaka, Narayanganj and Gazipur districts and Chittagong city areas, are eligible for receiving loan amounting to maximum Tk 350 million from the PFIs at maximum 6.0 per cent interest.
The loan will be sanctioned for maximum 15 years, including maximum three years grace period, according to the BB officials.
On December 13, 2015, the government signed UBSP with JICA to ensure workplace safety in the apparel industries, a concern that surfaced following several tragedies.
As the implementing agency of the project, BB will disburse funds through selected banks and NBFIs.
