The Bangladesh Textiles Mills Association has demanded that the government should withdraw the Bangladesh Bank provision that makes the bonded warehouse licence mandatory for opening back-to-back letters of credit to encourage exports of local textiles.
Textile makers said that many small and medium mills in the country were exporting locally produced fabrics and yarn but they were not getting the facility of back-to-back LCs due to the Foreign Exchange Transaction Guidelines of the Bangladesh Bank.
BTMA president Mohammad Ali Khokon on January 23 sent a letter to BB governor Fazle Kabir demanding the withdrawal of Section III of the guidelines that states ‘only recognised export-oriented industrial units operating under bonded warehouse system will be allowed the back to back LC facility’.
The BTMA said that Section III of the BB’s Foreign Exchange Transaction Guidelines obstructed the opening of back-to-back LCs for the textiles mills which have no bond licence and the rules should be waived or relaxed for the textile mills for expansion of the local industry and boosting exports.
The letter said that many textile makers were reluctant to obtain bond licences as they received duty benefits for importing raw materials as per the government’s decision.
Procedural cumbersomeness also discourages the textile mills owners from obtaining and maintaining the bond licences, the letter read.
The BB should waive the mandatory bond licence requisite for the local textiles manufacturers in opening back-to-back LCs to encourage the local industry as the government was working towards gradually phasing out the bonded warehouse system.Source: https://www.maritimegateway.com/btma-demands-withdrawal-of-bond-licence-requirement/