TBT DESK: The Bangladesh Bank has directed all scheduled banks to ensure adequate financing for raw hide traders, aiming to facilitate smooth collection, preservation and marketing of hides ahead of Eid-ul-Azha.

The instruction came on Tuesday through a BRPD circular, which described the leather sector as a key labour-intensive and export-oriented industry contributing significantly to national income and foreign exchange earnings. The central bank noted that the sector relies heavily on locally sourced raw materials.

According to the circular, nearly 50 per cent of the industry’s annual raw material supply is generated during Eid-ul-Azha, making timely and sufficient credit support crucial for maintaining stability in the sector.

To ensure liquidity, banks have been instructed that their 2026 credit targets for raw hide purchases must not fall below those set for 2025. The BB also emphasised that financing should reach the grassroots level, allowing seasonal traders and small-scale merchants to take part effectively in the procurement process. Loans are to be extended based on established bank-client relationships.

In a bid to facilitate fresh lending, the central bank has allowed the rescheduling and relaxation of existing loans, including those held by defaulted borrowers in the leather sector.

Banks have been asked to complete the rescheduling process — along with arrangements for compromised amounts — by June 30, 2026, enabling borrowers to regularise outstanding dues and access new credit for the current season.

For monitoring and compliance, all scheduled banks must submit detailed reports on their credit targets and actual disbursements to the Director of the Banking Regulation and Policy Department-1 by July 31, 2026, in the prescribed format.

The directive has been issued under Section 45 of the Bank Company Act, 1991.