Extend tenure of import loans

The Chittagong Chamber of Commerce and Industry has urged the central bank to extend the tenure of post-import financing (PIF) to keep the market stable and ensure a smooth supply of consumer goods during the pandemic.

The PIF is given to help importers pay for imported goods.

On June 13, the Bangladesh Bank fixed the tenure at 90 days for PIF for consumer goods, but the chamber has requested to extend it to 120 days.

In the case of commodities, traders usually pay 20 per cent of the goods' price at the time of opening letters of credit, and the rest 80 per cent after receiving the goods.

However, big traders can bring in their products by utilising the PIF facility through bank loans and pay after selling the products, industry insiders said.

So, it has become tough now to clear the payments on time as it takes long during the pandemic to get the money back by releasing and selling the commodities, traders in the port city say.

The traders expressed their worries and said that they might default on the loans if the tenure is not extended.

It takes 45-60 days for a consignment to reach the port after opening an LC, said CCCI President Mahbabul Alam.

As large ships could not reach the port, goods carried by them are unloaded through small ships from the mother vessels before they are brought to the ports, he said.

It takes a few months as most of these products are sold on credit. "In this case, the tenure of PIF needs to be increased to 120 days from 90 days," he said.

"I have written to the governor of the Bangladesh Bank on June 21 to cancel the order until the Covid-19 situation becomes normal. Hopefully, he will consider the issue."