BSS, Dhaka :
Speakers at a roundtable Saturday stressed on introduction of ‘factoring’ in Bangladesh to expedite the export-import activities, as the local exporters become gloomy to their customers due to deferred payments.
They urged the Bangladesh Bank as well as other concerned authorities to develop skill, capacity and legal framework to start the financing mode in limited scale in the country following international practices.
Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Institute of Bank Management (BIBM) jointly organized the discussion titled “Factoring: A Better Alternative to Letter of Credit” at DCCI auditorium.
Factoring is a financial transaction in which a business job sells its accounts receivables or invoices to a third party (called a factor) at a discount. In advance factoring, the third party provides financing to the seller of the accounts in the form of cash. Factoring is not a loan. It is the purchase of a financial asset.
Prof Dr Prashanta Kumar Banerjee, Director (Research, Development and Consultancy) of BIBM, made a keynote presentation on the topic of the roundtable.
Bank and Financial Institutions Division (BFID) Secretary Dr M Aslam Alam was chief guest while Dr Toufic Ahmad Choudhury, Director General of BIBM, as special guest.
M S Siddiqui, Member of the Standing Committee on Export Policy, Promotion, Diversification, Multilateral and Bilateral Trade Agreements, S A Chowdhury, Chairman of Janata Bank Board of Directors and M Masud Miswas, General Manager, Foreign Exchange Policy Department of Bangladesh Bank, took part as panel discussants.
M S Siddiqui said the policy makers should understand the global practices and in line it, they should ensure a hassle free environment for the business community.
He also stressed on the revision of the Foreign Exchange Act of the country, which had formulated in 1947.
S A Choudhury said the government could introduce the factoring in the country in a limited scale from next year. But, skill, capacity and policy frame work as well as electronic currency management should be developed before go to the system, he added.
Choudhury also emphasized on developing skilled manpower in banking sector as well as in business community to manage the financial service. Dr Toufic urged the business community to develop competence and superiority to their buyers to accumulate maximum benefit.
He also advised the businessmen to be careful about contact formulation.
Dr M Aslam Alam said although factoring requires comparatively more charges, but its use is being increased in developed countries due to it natures of taking the responsibility of risk and speedy payment.
The secretary said they are the brink of finalization of the Foreign Exchange Act. So, the DCCI and organizations should forward its recommendations on the draft act quickly, he added.
He also stressed on the joint work to overcome the problems of payment system during export and import.
