Staff Correspondent: Banks are not making payments worth $47 million to 26 textile mills that supplied apparel raw materials to readymade garment exporters under back-to-back letters of credit.

Textile mills owners claimed that after submitting acceptance of buyers and negotiating documents, the LC opening banks were giving payment dates, but not making payments.

They alleged that it was a complete violation of banking rules for not making payment to the suppliers after giving payment date.

According to Bangladesh Textile Mills Association data, the payment worth $45.8 million against supply of yarn from 21 spinning mills to 363 RMG factories remained overdue for one year.

The data showed that payment worth $1.32 million against supply of fabrics from five mills to 13 RMG factories remained overdue for one year.

In all cases, mills made shipments as per the condition of LCs and buyers gave acceptance of the shipments.

After submitting buyers’ acceptance and the other documents, the LC opening banks were giving payment date to the suppliers but not making payment, BTMA alleged in a letter sent to Bangladesh Bank deputy governor Nurun Nahar on March 3.

The letter signed by the BTMA president Mohammad Ali Khokon said that the spinning mills were facing difficulties in making timely payments for imported raw materials.

Earlier, the BTMA sent a separate letter to the financial integrity and customer services department of Bangladesh Bank, seeking necessary steps in this regard.

In the letter, the BTMA said that its member Salek Textile Ltd supplied fabrics to local RMG exporter Shirt and Jacket Zone Ltd against two separate back-to-back LCs issued by a private commercial bank, dated March 3, 2023 and May 8 2023.

After making shipments, Salek Textile Ltd negotiated documents through another private commercial bank to get maturity date from the LC opening bank.

The LC opening bank gave date October 8 and November 29 respectively for the payment against the two LCs, but the payment still remained pending.

BTMA secretary general in charge Monsoor Ahmed, on Thursday said that despite getting maturity date, the payment of the deemed exporters in the textile sector kept overdue almost all the banks in the country.

Salek Textile Ltd chairman Matin Chowdhury said that his payment worth $2.31 lakh against two LCs still remained due.

‘Keeping payment overdue after maturity date is clear violation of bank rules and we requested the Bangladesh Bank to compel the LC opening bank to make payment in due time,’ he said.