Bangladesh Banks Warned: No Loans to Non-Compliant Garment Factories

Dr. Atiur Rahman, Bangladesh Bank governor, issued it during an April 28 speech at a banking seminar. Since then, deaths in the Rana Plaza building's collapse have risen to nearly 400.

Dr. Atiur Rahman, governor of Bangladesh Bank, warned banking executives on April 28 that legal action would be taken against them if they provide loans to non-compliant garment factories. "Stop lending to non-compliant garment factories where conditions are not suitable enough to ensure safety of the workers and employees, or face punishment," He told the chief executives of banks during a seminar that day, The Independent, an English-language Bangladeshi newspaper, reported.

Bangladeshi media have reported the Rana Plaza eight-story building that collapsed in Savar last week was not built according to safety codes and had developed cracks shortly before the collapse. Garment workers reportedly reported the cracks but were ordered to remain at work inside the building.

The newspaper reported that the Bangladesh Garment Manufacturers and Exporters Association identified 850 non-compliant garment units in December 2012 and asked them to improve working conditions or face closure.

BGMEA members had closed their factories for two days after the collapse but reopened them April 28. "We plead to the government for security so that no untoward incident takes place," the association's president, Atiqul Islam, said in a news release posted by the asociation. He spoke during a media briefing at its Dhaka office. "We welcome the government for arresting the owner of the faulty plaza, Sohel Rana," he said, adding that the designers and officials of Rajdhani Unnayan Kartripakkha, who approved construction of the building, also should be arrested.

BGMEA has created a nine-member team to investigate the collapse of Rana Plaza and submit a report within 10 days. It also is urging countrymen to donate money to a fund for the Savar victims.

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