The frozen food exporters of the country will sit in a discussion today (Monday) with the central bank for resolving some long-staggering banking problems standing in the way of export.
Bangladesh Frozen Foods Exporters Association (BFFEA) sought the permission from the Governor of the Bangladesh Bank (BB) to discuss the issues on December 13, 2005 last.
BFFEA president Maksudur Rahman in a letter said frozen foods, the second largest export-grossing sector, is facing setbacks due to higher rate of interest charged by Agrani Bank, a nationalised commercial bank (NCB).
"In line with the BB directives, the state-owned banks could charge up to 7.0 per cent interest against the loan disbursed for export purpose, but Agrani Bank is making the frozen food operators pay an additional 1.0 per cent as service charge", he said in the letter.
While talking to the FE, a high official of Agrani Bank said the bank is charging 1.0 per cent more due to high bill purchasing rate and increased cost of fund as well.
"We are charging the additional amount only for the export bill", he said.
The sector has earned foreign exchange worth about US$ 420 million in the last fiscal.
The frozen food exporters are allegedly being harassed by some whimsical conditions imposed by such banks that include claiming indirect interest, reluctance in negoti ating the bill-floating rate and unwillingness to repay the customers after rejection of consignments, they complained in the letter.
The BFFEA members export frozen foods worth about Tk 1.5 billion annually through state-owned banks including Agrani.
They claimed that the NCBs are depriving the frozen food exporters in the export bill negotiation rate, otherwise known as the foreign currency rate offered to the exporters.
Agrani Bank is paying Tk 250 to Tk 300 million less against an export bill annually, BFFEA leaders said, adding that as a result profits from exports are plummeting.
"We are facing problems in repaying the loan along with making payments to the shrimp farmers. The imbalanced currency rate also discourages the export of the frozen foods", a BFFEA member said.
BFFEA president requested the BB to take serious steps for sustaining the profitability of this potential sector in today's competitive world market.
BFFEA members also claimed that Agrani Bank is charging 12 per cent interest, while other NCBs are taking 7.0 per cent on the advance loan availed by the association members against the government-announced 10 per cent cash incentive.
The Agrani Bank is also charging 12 per cent rate of interest against 10 per cent, in the overdue export bill of the frozen foods.
"We are charging the commercial credit rate against the loan, as it is not included in the export loan", the official said.
The BFFEA members will also request the BB to extend the duration of interest rate charging period from 270 days to 365 days.