Top business leaders conveyed their concerns to Bangladesh Bank Governor Dr Ahsan H Mansur, over the various crises impeding business operations.
A 13-member delegation, led by the Bangladesh Chamber of Industries (BCI), expressed apprehension that the newly proposed loan default rules could result in the closure of numerous enterprises during a meeting with the central bank governor at his office on Sunday (12 January).
Over the past three years, the price of gas has surged between 250% and nearly 450%, with further increases anticipated.
Coupled with high interest rates, complexities in opening letters of credit, and soaring production costs, businesses are struggling to maintain operations.
The delegation emphasised the reluctance to invest in new ventures under such adverse conditions and disclosed plans to scale back some business activities to avert further losses.
Despite five months having passed since the government's fall, the business environment has yet to stabilise, exacerbated by deteriorating law and order and political unrest over reforms and elections.
BCI President Anwar-ul Alam Chowdhury Parvez highlighted the impact of high inflation on sales, the inability to operate at full capacity due to soaring costs, and the difficulty in securing necessary loans.
"Production has declined by 30% to 40%, and private sector credit growth is at 7.66%. With ongoing issues in securing adequate letters of credit and the imposition of higher taxes on various products, the survival of industrial establishments is now a formidable challenge," Chowdhury stated.
He further advocated for an "exit policy" similar to those in other countries, which the governor acknowledged, revealing that a committee has been formed to expedite the process.
Chowdhury also criticised the slow disbursement of cash incentives for export-oriented industries, urging that the timeframe be reduced from nine months to one year to two to three months to ensure operational continuity.
The governor responded by reiterating the central bank's focus on reducing inflation and enhancing private sector credit flow.
He expressed optimism about stabilising the economy by June, despite the current challenges.
Industry leaders also voiced concerns about the recent Tk75 gas price hike, warning of its detrimental effects on global competitiveness.
The BCI proposed that loan repayment timeframes and the single borrower exposure limit be adjusted to provide relief to struggling businesses.
Business leaders underscored the need for prompt reforms, including the inclusion of entrepreneurs in the Bank Reform Committee and emphasising the agro-processing sector to streamline supply chains.
They warned that without immediate measures, the implementation of new loan default regulations in April could lead to the closure of many enterprises, further compounding the economic woes.
Governor Dr Ahsan H Mansur assured that the central bank is committed to addressing these issues, focusing on inflation control and economic recovery.
