The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently asked all its members to report to the Bangladesh Bank by the end of this month their non-repatriated export proceeds up to 10 per cent. It issued a letter to this effect on March 16, calling for taking the move through their respective lien banks by March 30.
The information should be on the goods shipped since December 2019 to February last.
It is expected to help the factories clean their respective status in the online system of reporting exports and continue to get various export facilities, despite having huge amount of unrealised payments due to the COVID-19 pandemic, a Bangladesh newspaper cited industry insiders as saying.
The Bangladesh Bank uses the online system to track down whether the export proceeds are repatriated or not and accordingly allow the factories to enjoy the existing export facilities.
Amid the pandemic, Bangladesh Bank had earlier decided that the cases of unrealised export proceeds up to 10 per cent would be accommodated on the on-line system up to March 31 without approval from the BB’s discount committee, exporters said.
The cases of discount above the threshold would, however, require approval from the committee. Usually, the exporters have to get approval from the committee in cases of partially non-repatriated export proceeds.
The move came against the backdrop of apparel makers’ sufferings from the heavy cuts on the bills by their buyers, who were reportedly facing fund flow crisis due to the pandemic.
“In many cases, the entire export proceeds have not repatriated as global readymade garment (RMG) buyers are also financially affected due to the Covid-induced disruptions,” the BGMEA said in its letter to the members.
In the recent months, the exporters claimed, such cases of non-repatriated export proceeds has gone up due to the pandemic as the exporters were facing frequent discounts on their bills.
Meanwhile, BGMEA, in another letter to the National Board of Revenue on March 4, requested not to put pressure on an export-oriented garment factory for its unrealised export proceeds.
The factory’s buyer, JC Penny, has declared itself bankrupt due to the pandemic and a total of $1,433,715 against 25 of the factory’s exports have not been repatriated, according to the letter signed by BGMEA president Rubana Huq.
The BGMEA letter said many global buyers have become financially insolvent since the outbreak of coronavirus in major importing countries especially in the EU, China and the United States.