Dhaka, Bangladesh (BBN)-The central bank of Bangladesh Wednesday asked the commercial banks to disburse 70 percent of cash subsidy against exports before auditing while the rest amount will be cleared after final inspections.
Bangladesh’s businessmen hailed the central bank's move saying that it would help the export-oriented sectors to clear wages and bonus to their workers and employees ahead of the Eid festival.
Under the new instructions, the banks are empowered to release the large portion of cash subsidy immediately after receiving preliminary documents of exports.
"We've issued the instructions in line with the stimulus package, announced by the finance minister on April 19 this year," General Manager of the Foreign Exchange Policy Department of the Bangladesh Bank (BB), the country’s central bank, Khandaker Khalidur Rahman said.
The finance minister has said 70 percent of cash subsidy will be disbursed immediately after receiving preliminary documents while the rest amount will be cleared after the final inspections.
The central bank issued a circular in this connection on the day asking the commercial banks to follow the new instructions relating to disbursement of cash subsidy to exporters.
The BB official also said the central bank will settle reimbursement claims, after receiving those from the commercial banks concerned within the next working day.
The banks have been instructed to preserve necessary documents against disbursement of cash subsidy for BB's surprise visit.
"If any disbursement of cash subsidy is made without maintaining proper rules and regulations, the BB will detuct the amount with interest from the concerned banks' deposit with the central bank," the BB said in its circular, adding that punitive measures would also be taken against the officials concerned.
Acting President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Abul Kashem Ahmed welcomed the BB's move saying that the export-oriented sectors would be benefited from the new instructions relating to cash subsidy disbursement.
"Such a move ahead of the Eid festival would certainly help the export-oriented sectors to pay wages and festival allowances to their workers and employees," Mr. Ahmed added.
Exporters also welcomed the BB's latest move, saying that such measures would help the export-oriented garment and knitwear sectors to pay wages and bonus to workers and employees before the Eid festival.
"Definitely, the measures will have a positive impact on the export-oriented sectors," Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President MA Baset said.
The government has announced a fresh list of 15 exportable products with inclusion of two new items that would receive cash subsidy for the fiscal yea 2009-2010.
The exporters will receive cash subsidy on the products against net repatriation of the FOB (free on board) prices from July 1, 2009 to June 30, 2010, according to the announcement.
BBN/SS/SI/AD-10September09-5:49 am (BST)