Bangladesh Bank has decided to provide a soft loan to readymade garment (RMG) factory owners to help them pay workers' salaries for August, due to the ongoing unstable situation.
This decision was made during a meeting between the central bank Governor Ahsan H Mansur and leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Sunday. A notification was issued in this regard after the meeting.
Speaking to The Business Post, BGMEA President Khandoker Rafiqul Islam said, “We were already in negative export growth and we failed to continue production at least for 10 days in July-August due to the recent student revolution.”
"We urged the government and the central bank to provide a soft loan to pay the workers' salaries for August, and they have finally approved it," he said.
Rafiqul further added that around Tk 2,800 crore is needed to pay a single month's salary for the workers.
According to sources from the central bank and BGMEA, the loan is likely to be repaid within six months. The central bank has instructed all commercial banks to ensure the loan is repaid on time and the loan amount will be directly transferred to the workers' bank accounts or mobile financial services accounts.
Since September last year, Bangladesh has been troubled by regular unrest, including industry workers and political disturbance, a controversial dummy election and a crackdown on the oppositions by the ousted prime minister Sheikh Hasina.
These events have dominated global headlines. As a result, Western buyers reduced their orders, severely impacting the economy, which was already struggling with a shortage of foreign exchange reserves.
According to the National Board of Revenue (NBR), Bangladesh recorded $3.1 billion in export earnings from clothing exports in June and $3.19 billion in July. Exporters expect earnings for August to be similar to those of July.
Amid this turmoil, Bangladesh witnessed widespread student protests starting on July 1, which escalated into violence on July 15 when the Awami League, along with its affiliates and law enforcement, attacked the protesting students.
Lethal weapons were used against the unarmed demonstrators, resulting in at least 650 casualties, according to the UN Human Rights Council.
The protests eventually escalated into demands for the end of Sheikh Hasina's authoritarian regime, leading to her resignation and departure to India on August 5. Prof Yunus subsequently took charge as the chief adviser of the interim government.
