Bangladesh RMG units switching back to salary in cash

22 Dec '20

1 min read

Pic: Shutterstock

After using digital payment modes during the COVID-19 outbreak, readymade garment (RMG) units in Bangladesh are gradually switching back to cash-based salary payment, a new report has revealed. Digital payments by RMG factory owners witnessed an increase due to the stimulus package announced by the government to support temporarily laid-off workers.

To contain the COVID-19 outbreak, the government had put the country under lockdown from March 29 to May 30. Salary under the government's stimulus package was disbursed by RMG factories for four months from April to July 2020.

Despite the high benefits such as decreased payroll processing costs and lost worker production time and enhanced security associated with digital payments, factories are switching back to cash payments, said the survey report ‘Factory Wage Digitisation Trends’.

The survey was conducted by the Microfinance Opportunities in Bangladesh in collaboration with the South Asian Network of Economic Modeling (SANEM).

RMG factory owners are reverting back to cash mode of salary disbursement as the benefits of digitisation are not readily apparent, SANEM said in a statement.

Fibre2Fashion News Desk (RKS)

More Apparel/Garments News - Bangladesh...