State banks to give more loans to tanners
State-owned commercial banks are set to disburse 17 percent more loans to tanners this year than the last to shore up the leather sector.
Sonali, Janata, Agrani and Rupali, which account for 90 percent of the loans extended to the leather sector, plans to disburse Tk 502 crore this year. Sonali may distribute Tk 140 crore, Janata Tk 222 crore, Agrani Tk 90 crore and Rupali Tk 50 crore.
Officials of the state banks said they would be strict in giving out loans and no credit would be granted to defaulters.
A high official of Sonali Bank said the bank would disburse Tk 58 crore ahead of Eid-ul-Azha to procure raw hide; the remaining amount would be handed out during the course of the year.
Those who defaulted last year would not be given any credit this year, he added.
Shaheen Ahmed, chairman of the Bangladesh Tanners Association, said the loan amount would not be enough, as raw hide worth about Tk 4,000 crore are traded on the day of Eid.
“However, there is no pressure on the banks from our side to give out more loans than what they intend to.”
The price of rawhide is very low this time, he said. Rawhide is trading at Tk 2,000 apiece this year, down from Tk 2,500 last year. The price of leather goods in the international market has also fallen.
The central bank made a guideline on giving loans to the leather sector about five years ago. The banks have been strictly following the policy and are subsequently facing much less pressure now.
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