The government and the Bangladesh Bank have announced various stimulus packages amounting to around Tk1 lakh crore to bring the stagnant economy back to life.
The incentives have been declared without any consultation with stakeholders, and the central bank has repeatedly come up with changed circulars containing different guidelines for their implementation.
For this, it has been difficult for businesspeople to take advantage of those stimulus packages.
The business people have complained over not getting bank loans although one month has gone past since they have begun to incur losses massive because of the coronavirus outbreak.
The banking sector is also worried about its survival with a credit risk owing to easy terms on the loans.
On the other hand, economists think the packages have not been appropriate for being entirely dependent on banks with the government not giving cash assistance to the businesses.
Economists and businesspeople made those comments while addressing a discussion titled "Roadmap to Stimulus Loan Execution" at the conference room of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Wednesday.
The top organisation of businessmen recommended forming a working group –comprising of the finance ministry, the commerce ministry, the home ministry, the industries ministry and the FBCCI – in order to implement the stimulus packages and save the economy from the ongoing crisis.
Jashim Uddin, president of Bangladesh Plastic Manufacturing and Exporters' Association and commercial chairman of Bengal Bank, said though the government has announced a Tk5,000 crore package for the export-oriented industries, no one from the deemed export sector is getting loans because of various terms and conditions.
A large number of organisations from the sector have been asked to take loans from the bailout package for small and medium enterprises (SMEs) but that is not happening too, he added.
Mentioning that no bank is giving loans under the package, he said as per the central bank, they are allowed to take loans from the declared package to build their current capitals.
"But the banks are saying they have not got any specific directive to this end. As a result, we are not getting loans and cannot pay wages to workers," Jashim Uddin said.
Siddikur Rahman, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), claimed big companies along with SMEs are finding it difficult to get loans.
"Business people need loans right now to keep their factories operational as many types of machinery break down even if they lie inoperative for a few days," he added.
Selim RF Hossain, managing director at Brac Bank, said the problems the businesspeople are facing in availing loans because of repeated changes in circulars of the Bangladesh Bank.
"The stimulus packages have been declared without any discussion or assessment. There have been several changes in the circular for implementing the bailout package for the export-oriented sector. The circulars for other packages have also witnessed several changes. That is why the banks are now in confusion. Credit risk is being created for many terms and conditions on circulars," he added.
Prime Minister Sheikh Hasina has declared incentive packages worth Tk73,000 crore. Later, the Bangladesh Bank has taken the packages to Tk1 lakh crore.
The central bank regularly issued new guidelines to implement the declared stimulus packages. It has issued 98 circulars in total with new packages and by bringing changes in guidelines of the same packages again and again.
Economist Dr M Masrur Reaz, chairman of Policy Exchange, said repeated changes in the circulars and the packages' total dependence on banks do not seem to be appropriate.
He said India and many European countries give policy supports to businesspeople apart from giving them from banks. India has exempted from taxes which has brought in facilities for the banking sector alongside the manufacturing one.
Many countries have also given cash assistance. Thus, the business people have got funds without being dependent on the banks, he added.
Mentioning that because of the coronavirus pandemic, it is very difficult for the businesspeople to survive, ex-FBCCI presidents Kazi Akram Uddin and Mir Nasir Hossain said now it is time for the banks to come forward to help them out.
Kazi Akram Uddin said, "I am also a banker. But now the banks have to save the industries without thinking about their profits. They have to take immediate steps to release funds under the packages."
Disagreeing with his opinion, Ali Reza Iftekhar, chairman of Association of Bankers, Bangladesh, said, "It is equally important to save the banks like the manufacturing sector. If the banks cannot make profits, they will not be able to run their activities."
Talking about businessmen's complaints about not getting loans, he said, "They cannot provide them with loans without proper documentation. A guarantee is required for loan recovery. We have no liquidity crisis. We have taken all kinds of initiatives to disburse loans fast."
FBCCI President Sheikh Fazle Fahim, in his concluding remarks, said they are not putting pressure on the banks.
The stimulus packages have been declared after consulting with economists and businesspeople. But they have to work by forming a working group in order to resolve the existing problems and implement the packages. Initiatives have to be taken to release money from a 20,000 crore package for SMEs fast.