The Bangladesh Bank has asked the commercial banks to sanction fresh credit for handloom industry particularly to flood-affected weavers in Pabna and Sirajganj, by relaxing the existing rules and regulations.

Under the move, the flood-hit weavers will be eligible for fresh credit through rescheduling their previous classified loans. The banks may relax the provisions of down-payment for rescheduling of loans, if necessary.

The central bank issued a circular Thursday in this connection and directed the managing directors of all scheduled banks to follow the instructions on disbursement of loans to weavers for post-flood rehabilitation.

“We have relaxed the existing conditions on rescheduling of classified loans in the handloom sector aiming to help the weavers in the post-flood situation,” a BB senior official told the FE Thursday.

He also said the banks may apply their prudence for rescheduling the classified loan portfolios in the handloom sector in line with the latest directives.

The central bank also asked the banks to set up credit monitoring and compliance cells at different levels to ensure monitoring of the overall handloom loan disbursement without any harassments.

About one million weavers, dyers, hand spinners, embroiderers and allied artisans have been using their creative skills into more than 0.30 million active looms to produce around 620 million meters of fabric annually, according to the Bangladesh Handloom Board statistics.

The handloom sector shares 63 per cent of the total fabric production in the country designed for home consumption, meeting 40 per cent of the local demand for fabrics.

Besides, it provides employment opportunities to a million rural people, 50 per cent of which are female, while another half a million people are indirectly engaged in the industry.

Financial Express