Bangladesh Bank's new instructions on LC

Due to the crisis of US dollars in the country, Bangladesh Bank has imposed strict measures in opening loans in 2022. In addition to imposition of 100% letter of credit (LC) margin on several luxury products, banks have stopped lending facilities. Now that the situation has improved, the agency has withdrawn it.

The Central Bank has taken such a decision to bring back the momentum in the industry and trade of the country. However, as before, the condition of 100% deposit has been maintained in case of opening letter of credit or LC for importing some luxury goods. Instructions in this regard were issued yesterday Thursday.

It is said that the stability of foreign currency exchange rate and transactions in the country is progressing at the desired rate. In such a context, the aim has been to energize the trade and industrial sectors and ensure supply of consumer goods to the domestic market.

For this, new guidelines have been issued to determine the cash margin rate on the basis of banker-customer relationship in case of opening of import letter of credit or LC. However, 100% margin has to be deposited in case of opening letter of credit for import of 14 products.

These are – motor cars, electronic home or office appliances, gold and jewellery, precious metals and pearls, ready-made garments, leather goods, jute goods, furniture and decorative items, fruits and flowers, non-cereal food i.e. non-cereal food products, processed Foodstuffs and beverages or canned (can) foods, chocolates, biscuits, juices, coffee, soft drinks; Alcoholic beverages and tobacco and tobacco products or substitute products.

Bangladesh /FM