The Bangladesh Textile Mills Association (BTMA) has urged Bangladesh Bank to roll out a broad package of policy support for the country’s primary textile sector, already attracting $32 billion in investments.
Easier financing and regulatory relief are needed to restore production, contain banks’ bad loans and protect one of Bangladesh’s largest export industries, it said in a written proposal submitted to Bangladesh Bank Governor Md Mostaqur Rahman on Wednesday.
BTMA wants the central bank to lower lending rates, ease access to working capital, expand refinancing and export credit, relax loan classification rules, speed up trade finance settlements and revise several banking regulations. It argued that many mills with the capacity to produce are constrained by liquidity shortages rather than a lack of demand or competitiveness.
Prolonged gas shortages, higher energy prices, rising lending rates, raw material inflation, currency depreciation and working capital shortages have left much of the industry operating below capacity, BTMA said. It added that many textile and garment factories have already suspended production despite continuing to bear wages, loan repayments, interest and utility costs.
Restoring financially constrained mills to production would improve banks’ loan recovery, preserve employment, increase export earnings and strengthen macroeconomic stability, while further factory closures would raise non-performing loans, the association said.
BTMA represents about 1,883 spinning, weaving, denim, dyeing, printing and finishing mills with cumulative private investment of $32 billion.
The sector provides around 70 per cent of the backward linkage for the readymade garment industry, which together with textiles generates more than 85 per cent of Bangladesh’s export earnings. It contributes about 13 per cent to gross domestic product, replaces nearly $8 billion in annual textile imports and directly employs about 1 crore people while supporting another 4 crore, according to the association.
While welcoming Bangladesh Bank’s refinancing programme for closed and partially closed industries, BTMA called for project-based rather than group-based Credit Information Bureau assessments under the scheme.
It also sought effective lending rates of around 9 per cent for export-oriented spinning, textile and garment manufacturers, expansion of the Green Transformation Fund with lower financing costs and broader eligibility, and an extension of the business restructuring application deadline to 31 December 2026 from 30 June 2026.
The association further proposed linking the Export Development Fund ceiling to 65 per cent of an exporter’s realised export proceeds over the previous 12 months instead of the current $20 million limit and reducing the fund’s interest rate to 2 per cent.
It also called for banks to settle accepted or matured bills for locally supplied yarn and fabric under back-to-back letters of credit within seven working days, restore the term loan classification threshold to six overdue instalments from three, resolve operational disruptions at Islami Bank Bangladesh and other merged Islamic banks, extend pre-shipment refinancing to deemed exporters and restore cash incentives for supplies to factories in specialised economic zones.
The measures would help revive the export-oriented primary textile industry while strengthening export competitiveness, preserving employment, improving banks’ loan recovery and reinforcing financial stability, BTMA President Showkat Aziz Russell said.
