Bangladesh Bank recommends 300C for jute, 1,800C for other sectors

The government has provided cash assistance or subsidy of around Tk6,645 crore to the export-oriented industries in the just-concluded financial year. 

About 12.03% of the cash assistance has been provided to jute and jute products and the remaining 87.97% was received by others. 

In view of this, Bangladesh Bank has recently asked the government for Tk2,100 crore for the first quarter (July-September) of the current financial year.

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According to central bank sources, it has sent a letter to the finance department of the finance ministry on July 1.

"After reviewing the trend of money requested by banks for several months, it seems that the first instalment of the current financial year will cost Tk 300 crore for the jute sector and Tk1,800 crore for non-jute sectors," the letter read. 

It is also mentioned that the government is providing cash assistance or subsidy at different rates against the export of domestic textiles, frozen shrimp and other fish, leather goods, jute and jute products with other approved sectors. 

Subsidies are given up to 20%, depending on the sector. In the garment sector, special cash assistance at the rate of 1 percent is being given against exports.

According to the finance department, the first instalment was paid on July 27 last year, the second on November 9, the third on March 16 this year and the fourth instalment on May 6. 

In the jute sector, Tk125 crore was given in the first and second instalments, Tk 250 crore in the third and Tk300 crore in the fourth instalment. 

Apart from jute, in other sectors, Tk1,706.25 crore was paid in the first and second instalments, Tk1,433.1 crore in the third and Tk1,000 crore in the last instalment.

In all, Tk6,645.6 crore has been disbursed in four instalments for subsidies and special cash assistance in the outgoing 2020-21 financial year in these sectors, according to the Office of the Comptroller and Auditor General (CGA). 

Of this, Tk5,845.60 crore has been given to sectors other than jute. Meanwhile, Tk800 crore has been given to the jute sector. Bangladesh Bank has released this money to the banks in FY2020-21.

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Meanwhile, after reviewing the data of the banks, Bangladesh Bank has seen that the amount of unpaid claims in cash assistance in the outgoing financial year is Tk900 crore. 

Bangladesh Bank also informed the finance department that Tk100 crore is unpaid in the jute sector and Tk800 crore in other sectors from the total amount.

Exporters usually have to apply to a commercial bank with all the paperwork within six months of export to get cash assistance. In special cases, banks can extend the time by another month and a half. After checking the documents, the banks send the recommendation to Bangladesh Bank. 

Bangladesh Bank, after verifying it again and being satisfied, released the money in favour of the exporters.