Written by The Banking Post
The government has issued state guarantees worth Tk 5.80 billion in favour of Sonali Bank to help the Trading Corporation of Bangladesh procure essential commodities and keep the domestic market stable.
Under the arrangement, three separate guarantees have been provided to Sonali Bank’s Foreign Branch in Motijheel to facilitate financing for TCB, a state-run agency under the Ministry of Commerce.
With the backing in place, TCB is set to purchase key staples, including 5,000 tonnes of lentils through local tender, 22 million litres of palm olein through local tender, and 25,000 tonnes of sugar via international tender, officials said.
The move is part of the government’s broader effort to ensure steady supplies of essentials and contain price pressures through its trading arm, which conducts regular subsidised sales nationwide.
To maintain financial discipline, the Finance Division has imposed a series of conditions on the facility. The counter-guarantees will remain valid for one year from the date of issuance.
TCB will be required to inform the Finance Division immediately after each installment payment of the proposed Loan against Trust Receipt (LTR), along with details of any outstanding liabilities. Updated information on outstanding balances must also be submitted by the 7th of every month until full repayment.
Procurement must strictly follow existing public purchase laws and regulations, with full transparency and accountability to ensure competitive pricing.
The guarantees also stipulate that any government subsidy received by TCB must first be used to settle outstanding debts. The procured essentials will be distributed among around 10 million smart card–holding families under TCB’s targeted sales programme.
The government currently runs monthly nationwide sales drives of essential commodities at subsidised prices to help ease the cost of living.
