Fund shortage affects TCB’s procurement of essentials

Dhaka,  Thu,  21 September 2017
Published : 13 Jun 2017, 00:47:15 | Updated : 13 Jun 2017, 09:16:38

Fund shortage affects TCB’s procurement of essentials

Rezaul Karim
Trading Corporation of Bangladesh (TCB) has long been facing capital shortage and borrowing from banks to procure essential items for the purpose of market intervention, officials said.

As a result, they said, the procurement of essential items becomes difficult for them and costs get higher due to accrued interest on the loans.

One of the TCB's responsibilities is to intervene into the market when prices of essentials go up in the open market.

A senior official of the Ministry of Commerce (MoC) said the TCB has to pay interest at a rate between 10 per cent and 12 per cent in the case of taking Loans against Trust Receipt (LTR) from the banks. The interest expense increases the import costs.

As a result, the prices of the products increase and the corporation has to take subsidy from government, he said.

But the state trading agency could not make any visible impact with regard to keeping the market of essentials stable and price at a tolerable level for the common consumers, despite getting a large amount of financing every year, he said.

He added that the cost will become much lower and the consumers will be able to buy the goods at a tolerable price if the commodities are imported through cash payment.

The government provided about Tk 3.76 billion as subsidies including interest to the state entity between the fiscal years (FYs) 2010-11 to 2015-16, according to the TCB.

The TCB in a recent letter to the MoC sought interest-free seed money of Tk 2.0 billion with a view to keeping the prices of essential commodities stable.

"We have sent an official letter to the MoC, seeking a fund as seed money," said a high official of TCB, seeking anonymity.

Overall operational activities of the TCB will be smooth if the government provides the fund, he mentioned. As the TCB sells commodities at subsidised rates, it incurs huge financial losses every year.

No impact witnessed in respect of market intervention, despite repeated efforts by the TCB, due to the procedural delays, manpower shortage and lack of necessary warehouse in the agency, sources concerned said.

There are a total of 2,811 dealers listed with the TCB across the country till date, according to the corporation.
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