LC situation likely to be normal in two months

Bangladesh Bank Governor Abdur Rouf Talukder has expressed his hope that the current situation over opening letter of credits (LCs) is likely to ease in the next couple of months.

The central bank governor made the remarks while the board of directors of Dhaka Chamber of Commerce and Industry (DCCI) called on him at the bank’s head office in Dhaka, according to a DCCI press release issued on Tuesday.

“We are facing three major challenges now and these are ongoing Russia-Ukraine war, interest rate hike by the Federal Reserve and recent Covid situation in China,” the governor said.

However, he said that despite these challenges, our economy is quite stable. He reaffirmed that Bangladesh Bank has been relentlessly working through relevant policy measures and actions like lowering the LC margin to ensure seamless supply of essential commodities in the market during the upcoming Ramadan.

Considering the importance of remittance inflow, he mentioned that recently there have been some changes in the process of sending remittance including the waiver of relaxation of required documents and fees by the local banks and engaging Mobile Financial Services (MFS) to bring remittance home. As a result, he expects that the remittance inflow will increase considerably in future.

Dhaka Chamber of Commerce and Industry (DCCI) President Barrister Md Sameer Sattar called upon the Bangladesh Bank (BB) to assist the commercial banks with adequate foreign exchange supply to settle the LCs to ensure the continuous supply of essential commodities during the upcoming month of Ramadan.

Sameer Sattar also stated that public-private partnership is crucial to tackle any economic challenge.

He made the remarks as the Board of Directors of DCCI called on the Governor of Bangladesh Bank Abdur Rouf Talukder at the Central Bank office on Monday.

During the discussion, the DCCI president thanked BB for unveiling a timely Monetary Policy (MPS) that would help both private and financial sector to turn around as the MPS includes some instrumental policies and guidance.

He also hailed the initiative of continuing the re-financing scheme of Tk 50,000 crore for agriculture, CMSMEs and import substitute industries. He further emphasized on necessary reforms, like easing the documentary requirements for CMSMEs to access finance and, especially, in relation to Credit Guaranty Scheme for the better interest of the CMSME community.

Besides, he urged for easing the documentation process for young and innovative startups so that they can avail loans easily. 

He also underscored the need for enhancement of the private sector credit growth to accelerate the contribution of private sector in the economic resurgence, in this given geo-economic context.

In addition, he suggested to ensure good governance to contain the soaring non-performing loans (NPL) by taking stern measures for quick loan recovery focusing on habitual defaulters as well as necessary reforms to regulations in the banking sector.

DCCI Senior Vice President SM Golam Faruk Alamgir (Arman), Vice President Md Junaed Ibna Ali and members of the Board of Directors were also present during the meeting.