Committee on shipbuilding set to make recommendations
A 14-member committee led by Bangladesh Bank Deputy Governor Nazrul Huda is set to recommend assistance, including banking facilities, for the shipbuilding industry.
The immediate past caretaker government formed the committee on the last day of its rule. The committee is set to hold a meeting this week and make recommendations in a month from now.
After garments, the shipbuilding industry boasts a huge potential of earning foreign exchange, which prompted the government to form the committee, Bangladesh Bank (BB) officials said.
The recommendations the committee is likely to make include:
The central bank will ask commercial banks to issue bank guarantees at a minimum rate to the owners of shipbuilding companies.
BB will ask the commercial banks to open L/Cs at a minimum of 1 percent annual commission in case of importing raw materials for shipbuilding.
Banks will be asked to give loans as working capital for two years at a 7 percent interest rate to the industry -- a rate the garment industry enjoys.
"The garment industry takes four months to make and supply products. On the other hand, a shipbuilder takes two years to build a ship," the government observed.
Shipbuilders must open FC accounts to deposit money in a profitable way.
The conditions of raising funds from the capital market through IPO after three years of successful operations may be relaxed for the ship building industry.
Bangladesh has become a new destination for international companies seeking construction of small ocean-going vessels as traditional shipbuilding nations such as South Korea and China now focus on building large ships.
Comments