Nine commercial banks, including four state-owned ones, have completed preparation to disburse around Tk 583.09 crore as credit to tanners for purchasing rawhide of sacrificial animals during the Eid-ul-Azha to be celebrated on July 21.
Bangladesh Bank (BB) has already relaxed the loan rescheduling provision allowing rawhide traders to take fresh loans from banks by paying only three percent down payment against their last year's unpaid credits.
Tanners have started contacting banks concerned to take loans for purchasing rawhides during the Eid-ul-Azha, said Bangladesh Tanners Association (BTA) President Shahin Ahmed.
The commerce ministry will hold a meeting with leaders of BTA today (Thursday) where decision will be taken after discussion all issues, including fixation of hide price, sources said.
Sources said, state-owned Rupali Bank has allocated the highest amount of Tk 228 crore, followed by Janata Bank which has allocated Tk 140 crore, Agrani Bank Tk 120 crore, Sonali Bank Tk 25 crore, Islami Bank Tk 66.75 crore, Krishi Bank Tk 2.5 crore, Al-Arafah Tk 1.09 crore, NCC Bank Tk 0.50 crore and The City Bank has allocated Tk 0.25 crore.
"We've completed preparation to give credit to tanners . . . loans will be disbursed at the shortest possible time so that they can take steps to buy rawhide during Eid-ul-Azha," said an official of Janata Bank.
According to the Bangladesh Bank, many tanners failed to pay back the loans due to Covid-19 that adversely affected economic activities last year. Besides, the rawhide industry has been facing different problems for years, giving a fatal blow to the businesses to repay the loans.
BB said now the rawhide traders will be able to enjoy a repayment tenure of three years to pay back the rescheduled loans. But, they have to put collaterals against the rescheduled loans. Along with lands, the unsold rawhides of last year can be also placed as collaterals.
The tanners will enjoy the relaxed policy until August 31 this year.
In its circular the BB said about half of the supply of raw materials used in the domestic leather industry comes from the skins of sacrificial animals every year. At this time, if the supply of necessary funds to the leather traders is ensured, on the one hand, it will be possible to save valuable raw materials, on the other hand, the marginalized people will benefit financially by selling the skins of sacrificial animals.
Tanners said Covid-19 has slowed down the demand for leather products in Europe and the United States due to the global economic downturn. As a result, traders are not able to repay their loans as before.
According to bank sources, before Eid-ul-Azha last year, commercial banks, including five state-owned banks, had allocated Tk 644.50 crore in the sector but the tanners took a loan of only Tk 65 crore.
