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After relaxing the conditions for depositing cash margin for opening an LC, Bangladesh Bank has now allowed the import of Ramadan products with a 90-day grace period. From now on, this special facility will be available for the import of rice, wheat, onion, pulses, edible oil, sugar, gram, motor, spices, and dates to keep the market normal. Instructions in this regard were sent to all banks on Wednesday. Generally, except for raw materials and capital equipment used in industry, other products cannot be imported with a late payment condition.
The circular stated that to maintain a reasonable price level for products and ensure a normal supply during the upcoming Ramadan, an opportunity has been provided to import these products with a grace period. This facility will be effective until March 31. As a result, products can be imported with a grace period until then from foreign suppliers. Other instructions in this regard will remain in force. In another directive dated November 11, Bangladesh Bank has directed that the cash margin rate for opening import letters of credit for rice, wheat, onion, pulses, edible oil, sugar, gram, motor, spices, and dates be kept at a minimum level based on the banker-customer relationship. It is advised to give priority to establishing import letters of credit to ensure supply in the domestic market.
LC margin refers to the provision of keeping a minimum cash deposit at the time of importing a product. Usually, after the specified time for opening an LC for a product, it arrives in the country. After arriving in the country, after some procedures, the importer pays the liability and releases the product. While opening an LC, a margin of 5 to 10 percent was taken, considering the relationship with the customer. However, after the dollar crisis started in 2022, a minimum of 75 to 100 percent LC margin was provided for some essential food products, medicines, and other products, except for a few others, to tighten imports. This condition has been relaxed in most cases since the dollar crisis has passed.
Source: Online/GFMM
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