Visa partners with EBL

Visa Worldwide Pte Ltd (Visa) has partnered with Eastern Bank Ltd (EBL) to roll out a unique solution by offering trustee services to its member banks in Bangladesh to address the domestic settlement issues by maintaining cash collateral with the trust.

A virtual signing ceremony to this effect was held on Monday between EBL and Visa, the bank said in a statement.

This innovative trustee service towards domestic settlement obligations will provide Visa clients with the option to ensure security in the form of cash collateral in local currency (BDT) against domestic transactions. Previously such collateral (both for domestic and cross-border settlement obligations) was provided by way of USD denominated standby letters of credit (SBLC) issued by international banks favouring Visa.

The benefits associated with this structure entail cost savings and a simplified process for Visa member banks. Currently, Visa has 29 member banks in Bangladesh and the total collateral amount against domestic transactions is approximately 25 million dollars.

To celebrate this alliance, Bangladesh Bank Deputy Governor Ahmed Jamal was present as the chief guest at the virtual signing ceremony.

Soumya Basu, Visa’s Country Manager for Bangladesh, Nepal, and Bhutan along with representatives from EBL namely Ali Reza Iftekhar, Managing Director and CEO, Ahmed Shaheen, DMD and Head of Corporate Banking, M Khorshed Anowar, DMD and Head of Retail and SME Banking, and Riad Mahmud Chowdhury, DMD, and Head of Corporate Business were also present.

Ahmed Jamal appreciated the initiative and said this innovative structure would reduce the outflow of foreign exchange from the country. He believes that the majority of stakeholders will be interested to enroll in this alternative and innovative arrangement instead of providing the USD denominated standby letters of credit considering the domestic settlement issue.

Ali Reza Iftekhar said this deal was a new chapter in EBL- the Visa relationship and a historic one for the local banking industry. EBL has always been a pioneer in product and service innovation. This alternative solution to USD denominated standby letters of credit is not only a cost-effective option for Visa member banks in Bangladesh but has also other additional benefits for its stakeholders.