Banks are holding up payments to local textile manufacturers against purchase of raw materials by readymade garment exporters under back-to-back letters of credit, textile manufacturers alleged.
The Bangladesh Textiles Mills Association on Thursday sent a letter to Bangladesh Bank governor Abdur Rouf Talukder to resolve the issue, saying that a total of $35.86 million of 52 textile mills remained unpaid although banks issued maturity date against the amount.
BTMA president Mohammad Ali Khokon in his letter said that the local fabric and yarn manufacturers had been facing severe liquidity crisis due to unusual delays made by the banks in paying the accepted bills.
The BTMA leaders alleged that the RMG exporters were buying yarns and fabrics from both local and external sources under back-to-back LCs.
The banks made payments to foreign suppliers just after submission of the bill of lading as per the conditions of LCs, but they were deferring payments to the local suppliers for six months to one year.
The country鈥檚 spinning, weaving and dying mills are working as deemed exporters through supplying yarns and fabrics to the RMG exporters.
After getting the pro-forma invoice from the mills, the RMG exporters opened back-to-back LCs and the mills shipped the materials to the respective factories through truck receipts and delivery challans.
Despite taking signatures of factory authorities on the truck receipts and delivery challans, the banks forced the textile millers to obtain the acceptance of buyers on the bill of exchange, which was unnecessary, a BTMA leader said.
Even after fulfilling all requirements, the banks delayed payments over a number of excuses, including that export proceeds were not repatriated, export proceeds were repatriated partially or that there was lack of sufficient balance in the buyers鈥� accounts with the banks to pay the suppliers, he said.
