BCI urges BB to ease pressure on industries

The Bangladesh Chamber of Industries (BCI) has urged Bangladesh Bank to introduce long-term financing, lower lending rates, and relax loan classification rules to support industries struggling under mounting financial pressure.

The demands were placed before the central bank governor during a meeting on Tuesday where business leaders discussed the challenges facing the manufacturing sector.

In a letter submitted after the meeting, the chamber said many factories were under severe stress due to high interest rates, rising energy costs, gas shortages, inflation, political uncertainty, and weak consumer demand.

The organisation, led by its president Anwar-ul Alam Chowdhury (Parvez), said industries needed access to long-term financing as the country’s capital market was still not developed enough to meet large funding needs.

It proposed loans with a 12-year tenure, including a two-year moratorium period, and suggested refinancing facilities for importing capital machinery through offshore funds at lower interest rates.

The chamber also requested the central bank to encourage commercial banks to secure long-term funds from international lenders and development agencies.

According to the BCI, many industries began facing working capital shortages during the Covid-19 pandemic, a situation that later worsened because of disruptions in gas supply, higher fuel prices, and rising borrowing costs.

The letter said the increase in gas prices, depreciation of the taka against the US dollar, and lending rates of up to 15 percent had sharply raised production costs, leaving many businesses unable to operate at full capacity.

The chamber proposed converting overdue liabilities under letter of credit limits into long-term loans at subsidised rates so that affected factories could return to normal operations instead of falling into default.

The BCI also sought amendments to existing loan classification rules, requesting that loans be classified after six months instead of three.

It criticised the wide spread between banks’ cost of funds and lending rates, saying businesses were finding it increasingly difficult to survive with borrowing costs of 14-15 percent.

The organisation further called for the withdrawal of penal interest, reduction in bank charges, and easier access to financing for cottage, micro, small, and medium enterprises.