The government has granted Tk2,000 crore in cash incentives for export-oriented firms to boost workers’ monthly wages and bonus payments ahead of Eid ul Fitr according to sources. This Tk1,000 crore was released today (13 March) and the balance was disbursed on 5 March. Mohammad Hatem the president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made a plea earlier this month for the Finance Division to make sure that workers were paid on time before the Eid holidays.
Additionally, because this incentive is intended to directly address the current wage payment problem for industrial workers, the government has instructed banks not to use these funds to amend earlier loan repayments. This decision comes after three different meetings that were held at the Secretariat and the Chief Adviser’s Office. A senior official of the Labour Ministry, commenting on condition of anonymity, said, “The meetings decided to ask banks not to alter loans with the monetary incentives. This time, paying employees’ paychecks will come first, and loan adjustments will follow.”
These cash incentives are the third and fourth installments of the export incentive allotted for export sectors for the current fiscal year, 2024-25. The Office of the Controller General of Accounts will shortly announce the debit authority for the matter, and the Bangladesh Bank will supply the incentives in accordance with the requests of the relevant banks to enable payments to the exporters in question.
BKMEA President Mohammad Hatem stated that “With representatives from the Bangladesh Bank, the finance ministry, the finance division, the labor ministry, the Department of Inspection for Factories Establishments and various banks in attendance we [BGMEA and BKMEA] held a meeting at the Ministry of Labour and Employment at the Secretariat today.” The banks were asked not to modify loans using these cash incentives during the meeting.
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Additionally, he said that association leaders have asked the government to release an extra Tk2,000 crore before the Eid holiday that about 20 garment factories are still extremely vulnerable to possible unrest before the holiday and that factory owners have been asked to submit their export documents so that the government may consider ordering banks to release some funds in advance for paying workers’ wages and Eid bonuses. This month, factories must pay workers their wages from the previous month, their Eid bonuses and half of their wages from March.
In a recent study the commerce ministry noted that 500 RMG enterprises were at risk of disturbance due to the distribution of wages and festival allowances in the run-up to Eid ul Fitr. In order to guarantee on-time payments before the holidays. The examination also found 36 factories to be very susceptible and maybe in need of financial assistance. In a letter dated March 4, the BKMEA asked the Finance Division to pay Tk7,000 crore in unpaid monetary assistance for exports before to Eid-ul-Fitr. Because delays could seriously affect the export sector, the letter encouraged the Finance Division to take exceptional measures to deliver the funds as soon as possible, preferably by the 15th of Ramadan.
