Bangladeshi tannery gets 400 crore from state owned bank

Three state- owned banks are disbursing over Tk 400 crore in loans among the leather industries to help them purchase hides during the coming Eid-Ul-Azha. The banks are offering the sector more loans this year to overcome impact of global economic recession. But loan defaulters will not be eligible for this loan, banks officials said They said the loan will be made available to the tannery owners by Nov 26. Last year, the three banks disbursed Tk 336 crore among the leather industries, of which Janata Bank gave Tk 163 crore,Agrani Bank Tk 125 crore and Sonali Bank Tk 48 crore. Janata Bank will disburse Tk 180 crore this year and it has already decided to give three large leather industry Tk 65.50 crore. Board of directors of Agrani Bank will sit on Tuesday to select the industries it will give loan Leather and leather products are among the major export items that are affected by global recession. Chief executive officer cum managing director of Janata Bank SM Aminur Rahman told bdnews24. com: "The banks are disbursing more loans than before to protect recession-hit leather industries, stop smuggling of leather and increase leather collection inside the country." Aminul said: "Like every year, banks have prepared to disburse loan among the large leather factories. Both state–owned and private sector banks are offering loan for purchasing hides and skin, he said Some 80 percent of the demand for hides by the tannery industries is met during Eid-Ul-Azha. Former chairman of Bangladesh Tanners' Association Harunur Rashid told bdnews24 that the leather industries had been badly hit by recession. Export of leather and leather products dropped by 60 percent during the first quarter of FY 2009-10 , he said It will be difficult for the industries to survive unless government extends financial support to the sector, he said Aminur Rahman told bdnews24. com: "Our tannery factories might turn sick in absence of financial support. So, banks must come forward to protect the industry." An official of Sonali Bank on condition of anonymity told bdnews24 that his bank had decided to give the industries loans amounting to Tk 65.50 crore. Any good entrepreneur seeking loan ahead of Eid will receive the funding, he said CEO cum managing director of Agrani Bank Syed Abu Naser Baktiur said: "Default loans have accumulated as most of the companies failed to repay previous loan." Yet companies will receive the loan equal to the amount repaid last year, he said He said: "The board of directors in its Tuesday meeting will decide about how much loan will go to which company." An Agrani Bank official said the bank has decided to disburse loan amounting to Tk 150 crore this year while the figure was Tk 100 crore last year. As per statistics of EPB, the export of leather and leather products has shrunk by 24.55 percent during the first quarter of current fiscal year. The sector earned foreign exchange worth Tk 3000 crore during 2008-09 fiscal year.