The central bank of Bangladesh asked all scheduled banks to open bank accounts for ready-made garment (RMG) workers with an initial balance of Tk. 100 or 0.96€ for payment of their wages through the banking channel, officials said on Tuesday.
“We’ve taken the latest move to bring the garment workers under the banking network to speed up the ongoing financial inclusion in Bangladesh,” a senior official of the Bangladesh Bank said.
In a circular issued by the central bank said there will be no obligation of maintaining minimum balance, and banks cannot charge any fees for the services, according to the circular issued by the central bank. Garment workers must show the copy of their national and employment identity cards to open their accounts.
“We’ve asked the banks to submit reports on opening of accounts for ready-made garment (RMG) workers on a quarterly basis in prescribed forms to the Green Banking and CSR Department of the central bank within 15 days of the end of a quarter,” the central banker noted. For example the report for the December 31, 2013 quarter would be submitted by January 15, 2014, he explained.
Paying wages through bank accounts, instead of current cash payment practices, would ensure timely and correct payment to the workers eliminating the lope holes of late, partial and non-payments by employers which often causes financial and social sufferings to the workers, says Kauser Bhuiyan, former EU diplomat and Sustainability Advisor to international companies.
He further says that late or non-payment of wages often causes angry protest by the workers and temporary factory closure in Bangladesh causing delay in production and shipment of goods to the buyers. Global brands would be well advised to ensure wage payment through bank accounts by their suppliers for better transparency and fairness to the workers’ rights, according to Mr. Bhuiyan.