Written by The Banking Post
Bangladesh Bank (BB) has eased LC (letter of credit) margin rules to ensure enough supply and price stability of key essentials during the month of upcoming Ramadan.
As part of the move, the central bank in a circular issued on Tuesday ordered commercial banks to keep the cash margin rate at the minimum level when opening LCs for importing essential commodities ahead of the upcoming Ramadan, which is expected to be observed from mid-February next year.
And the facility of eased LC margin will remain in effect until March 31, 2026, according to the circular.
The commodities covered under this facility include rice, wheat, onion, lentils, edible oil, sugar, chickpeas, peas, spices, and dates. Demand of these items normally goes up manifold during the month of fasting.
Under the directive, banks have been allowed to set the LC margin at their discretion based on the banker‑customer relationship, instead of maintaining a fixed percentage.
Earlier, importers were required to maintain a 100 per cent cash margin for LCs against imports of certain products. The banking regulator considering the market demand later allowed such flexibility based on banker-client relationships and it was in effect until 31 March last.
