The Ministry of Textiles and Jute at a number of meetings highlighted the urgency for refinancing the jute millers and urged the Bangladesh Bank to introduce the block account facilities to the millers to keep the sector stable.

Bangladesh Bank (BB) to help private jute millers and exporter overcome the acute liquidity crisis which put most of mills in dreadful straits has directed the commercial banks to provide "Block Account" loan facilities.

As per the recent circular by the central bank, the managing directors of schedule banks to take necessary measures to ensure fresh working capital for private jute millers keeping their outstanding loans along with five years' interest in a 'block account' on the basis of bank-customer relationship.

The interests of 5 years' loan up to June 30, 2014 will be taken into the block account with a rate of 10.0 percent interest with 10 years' re-payment facilities. They will also get a 2-year moratorium facility.

According to the circular, in case of non-realization of the loans within the stipulated period, the bank will apply its own rules to realize the same and can apply the rules of classification and provisioning. Affected and interested jute millers and exporters can avail the facility for which they are advised to apply to their concerned banks within September 30, 2014.

The central bank took the decision following a number of requests made by the Ministry of Textiles and Jute that urged the central bank to implement its earlier decision which also instructed for "block account" and loan facilities for private jute millers in a bid to retrieve the ailing jute industry which is passing through a hard time due to liquidity crisis.

The private jute millers and exporters are going through a crucial phase due to lack of fund crisis. The situation has goaded further as export earnings from jute and jute goods have also declined substantially due to decrease in demand in the international market.

Export of jute and jute goods witnessed a 20 percent drop while the raw jute experienced a decline of 45 percent. In the just concluded fiscal year export earnings from jute products plunged to US$ 824 million as against US$ 1163 in the previous year.

BJMA chairman Md. Shams-uz-Zoha at a meeting of jute ministry stressing the need to implement block account, which can only save the jute industry. If there is any ambiguity or obscurity, this should be informed to the central bank for immediate solution.

The millers have urged the banks to set the cutoff date on June 30, 2014 instead of December 31, 2013 in case of block accounts. They also demanded allowing EDF fund (Extended Development Fund) in case of import of capital machinery and spare parts.