Cenbank to lift LC margin on essentials import ahead of Ramadan

The Bangladesh Bank has decided to lift the letter of credit (LC) margin on import of essential goods until Ramadan.

"We will issue a circular on Sunday (10 November) not to impose LC margin on essential goods," Bangladesh Bank governor Dr Ahsan H Mansur said after a meeting with Finance Adviser Salehuddin Ahmed at the Secretariat.

The governor said a few large corporations, including City Group, Meghna, Bashundhara, and TK Group, are major importers of edible oil, sugar, and wheat. 

"However, the single-borrower exposure limit restricts their ability to import these products in bulk. To address this, these corporations will be temporarily exempted from this limit for the next 2-3 months specifically for daily commodity imports," he added.

He stated, "The single-borrower exposure limit is a crucial criterion and should not be violated. Relying heavily on a single borrower poses risks for banks, which is why capital reserves of banks must be strengthened."

He further emphasised that the single-borrower limit would be strictly enforced in the future, adding, "I will not allow it to be violated."

Addressing concerns about the dollar supply, the governor clarified, "There is currently no dollar shortage. Anyone can approach any bank and open an LC of any amount. Please bring any instances of payment difficulties to my attention."

To further alleviate the hardship faced by low-income households due to inflation, the government also decided to distribute 10kgs of rice per family every month through the Trading Corporation of Bangladesh (TCB). Currently, TCB cardholders receive 5kgs of rice at a subsidised rate each month.

Yesterday, the central bank relaxed rules for import of essential food commodities to ensure adequate supplies during Ramadan.
 
Banks will open letters of credit (LCs) for import of items such as rice, wheat, onion, pulse, edible oil, sugar, egg, chickpea, spices and dates based on their relationship with clients, it said.