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Research Workshop on Trade Facilitations in RMG by Banks: Risks and Mitigation Techniques held at BIBM


Press Release
Dhaka,12 August,2018
A day long research workshop was held at the Bangladesh Institute of Bank Management (BIBM) on August12, 2018 in its auditorium. The institute organized the programme in association with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
 A paper titled " Trade Facilitations in RMG by Banks: Risks and Mitigation Techniques " was presented in the workshop by Dr. Shah Md. Ahsan Habib, Professor & Director (training) of BIBM. Other members of the research workshop team are Monir Hossain, Diector, BGMEA;Antara Zareen, Asistant Professor, BIBM; Tofayel Ahmed, Asistant Professor, BIBM; Mohammad Anisur Rahman, Joint Director, Bangladesh Bank; Mahmudur Rahman, Senior Vice President, Islami Bank Bangladesh Limited; A.T.M Nesarul Hoque, Vice President,Mutual Trust Bank Limited; Md.Faruk Hossain, Asistant Joint Secretary,BKMEA.
The study identifies the problem areas as well as success factors in trade facilitations in RMG in Bangladesh. A good number of participant’s senior bank executives, academicians, media representatives, faculty members, officers of BIBM participated in the research workshop. BIBM Director General Toufic Ahmad Choudhury Chaired the Program.
Dr. Barkat-e-Khuda, Chair Professor of BIBM;  Helal Ahmed Chowdhury, Supernumerary Professor of BIBM;  Md.Yasin Ali, Supernumerary Professor of BIBM; Syed Mahbubur Rahman, Chairman ABB and Managing Director & CEO, Dhaka Bank Limited; Md. Mehmood Husain, Managing Director & CEO, NRB Bank Limited;Fazlee Shamim Ehsan, Second Vice President, BKMEA; Ahmed Shaheen,Deputy Managing Director, Eastern Bank Limited spoke among others at the workshop.
The survey of the Bangladesh Institute of Bank Management (BIBM) said, Shipment delays and late presentation of documents to Bangladesh's authorities are among the most critical challenges faced by the country's garment sector. Some 66 percent of the exports could not be delivered on time while late presentation of documents, which poses a money laundering risk, occurred 53 percent of the time.
Garment exports account for more than four-fifths of the country's total exports, earning about $30 billion in 2017, of which woven and knitwear garments constituting around 52 and 48 percent respectively, according to the survey.
The overdue bills raised concerns about money laundering and whether the exports actually did occur. The LCs cater to transactions between locals and foreign banks while contracts to direct deals between buyers and suppliers. During the survey, members of the BGMEA and the BKMEA pointed out some key operational challenges to trade facilitation and financing by banks.
These include low packing credit usage, inefficiency in assessing working capital, absence of credit limit tolerance and of a customised collateral system, and inconsistent trade charges among banks.
Shipment delays result from a lack of efficient workforce in the industry, said Fazlee Shamim Ehsan, second vice president of the BKMEA. Subcontract in the RMG sector is a great risk factor for banks and the government should give policy support to banks to minimise risks of foreign trade, said Helal Ahmed Chowdhury, supernumerary professor of the BIBM.
Banks should intensify monitoring in the entire import and export process to avert risks, said Syed Mahbubur Rahman, managing director of Dhaka Bank.  There is no alternative to training for reducing risks in foreign trade, said Mehmood Hussain, managing director of NRB Bank.
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Written by Manager

Monday 13th August 2018