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RMG Raw Materials

BB asks banks to follow new wastage rate

  • Staff Correspondent
  • 27 December, 2021 12:00 AM
  • Print news

Bangladesh Bank directed commercial banks with authorised foreign exchange dealers to follow the latest wastage rate of making apparel products.

Commerce ministry recently increased the maximum wastage rate to 30 percent in producing apparel products from raw materials.

This allows the garment exporters to import more yarn and fabrics duty free than the present level for the same amount of export. 

“The authorities concerned will follow the letter of commerce ministry on December 19 to take necessary steps for knitwear and readymade garments,” read a Bangladesh Bank circular on Sunday.  

The maximum wastage rates will be 27 percent for basic items, 30 percent for specialised items and 4 percent for sweaters and socks, according to a commerce ministry letter issued on December 19.

In the face of objections from the readymade garment exporters, the commerce ministry readjusted the wastage rates in the span of five months.

The rates earlier were proposed at 25 percent for basic readymade garment items, 28 percent for specialised items and 3 percent for sweaters and socks.

In 1998, the ministry set a maximum wastage rate at 16 percent in manufacturing garment items from yarns and fabrics.

In January this year, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sent a proposal to the commerce ministry to increase the maximum wastage rate to 40 percent.

Later, the Export Promotion Bureau sent a letter to 20 companies, asking them to find out the actual wastage rate.

Only two companies responded to the bureau's inquiry, saying their wastage rate was more than 40 percent.