Banks will provide Tk433 crore loans to tannery owners for purchasing rawhide after Eid-ul-Azha, the highest rawhide collection season in the country.

Of these loans, four state-owned banks (Sonali, Janata, Agrani and Rupali) will provide Tk 258 crore.

Of which, Janata Bank Limited has set a target of providing the highest amount of Tk 120 crore. Last year, the same amount of loans were planned to be distributed, but finally Janata Bank disbursed Tk 40 crore only.

According to Bangladesh Bank (BB), the tannery owners will get bank loans of Tk 433 crore to buy raw hides. A portion of this loan has already been disbursed, the central bank sources said.

This year, Rupali Bank is giving loans of Tk 30 crore, Agrani Bank Tk 83 crore and Sonali Bank Tk 25 crore.

After the disbursement of loans in the leather sector in the nineties, most of the loans were not repaid. As a result,the private banks have stopped giving loans for this sector due to non-repayment culture of tannery ownets.

Now all the four state-owned banks are lending more to buy raw-hide. Apart from this, a few private banks are giving a small amount of loans.

Bank officials say there is a tendency among tannery traders to invest the loans money in other sectors. That is why they willingly become loan defaulters.