BRPD Circular No. 15: Special Facilities to Leather Sector for Purchasing Raw hides

BRPD Circular No. 15: Special Facilities to Leather Sector for Purchasing Raw hides.

Department of Banking Regulation and Policy
Bangladesh Bank
Head Office
Dhaka.
Ashar 29, 1428
BRPD Circular No. 15 Date: -----------------
July 13, 2021

Managing Director / Chief Executive
All Scheduled Banks operating in Bangladesh

Dear Sir,

Regarding the provision of credit/investment facilities to leather traders for the purchase of hides from slaughtered animals on the occasion of the upcoming Eid-ul-Adha in 2021.

Scheduled banks have been distributing loans of notable amounts annually in favor of leather traders (all business establishments/industries in the leather sector including tanneries associated with raw hide purchase/sale and processing) for the purpose of purchasing hides from slaughtered animals on the occasion of Eid-ul-Adha. It has come to our knowledge that due to problems prevalent in the leather industry and the negative impact of COVID-19, a portion of the loans distributed for the purchase of raw hides from slaughtered animals in 2020 has remained unpaid. Consequently, it has become difficult for the scheduled banks to provide the necessary credit/investment facilities for the purchase of hides from slaughtered animals on the occasion of the upcoming Eid-ul-Adha in 2021.

2. In this context, nearly more than half of the raw materials used in the domestic raw material-based leather industry come from the hides of slaughtered animals on the occasion of the holy Eid-ul-Adha every year. If the necessary supply is ensured to the leather traders during this time, it will be possible to preserve valuable raw materials on one hand, and on the other hand, the rural population will benefit economically through the sale of slaughtered animal hides.

3. Considering the above, it has been decided that the outstanding amount of the loans distributed for the purchase of hides from slaughtered animals in 2020 may be rescheduled with a 3% down payment for a maximum period of 3 (three) years, provided that stock/auxiliary collateral remains in the warehouse of the concerned establishment against the outstanding amount. Under this method, after rescheduling, scheduled banks may distribute loans equivalent to the amount of the quota (allocated amount) previously fixed for the Eid-ul-Adha of 2020, following banking regulations based on the bank-customer relationship. It is noted that no compromised amount shall be collected for the provision of new loans for the purchase of hides from slaughtered animals in 2021 in favor of the said loan borrowers.

4. This facility will remain valid until August 31, 2021.

5. This directive is issued under the powers conferred by Section 45 of the Bank Companies Act, 1991.

6. This directive shall come into force immediately.

Yours faithfully,

(Md. Ali Akbar Farazi)
General Manager
Phone: 9530252