BB urged to ease restriction

The Bangladesh Association of Banks (BAB), a forum of private bank directors, has requested the Bangladesh Bank to relax the restriction on opening Letter of Credit (LC).

A BAB delegation led by its Chairman Md Nazrul Islam Majumder met with the central bank Governor Abdur Rauf Talukder on Wednesday.

Four deputy governors and the spokesperson of the banking regulator were present in the meeting.

After the meeting, the central bank Executive Director and Spokesperson Md Mezbaul Haque told the journalists that the meeting discussed the ongoing US dollar shortage.

He said that the banks are not able to open LC due to the ongoing dollar crisis and the BAB requested

BB to withdraw the restriction on LC opening.

Mezbaul Haque said that the governor asked the BAB chairman for help to bring in export earnings, which have not yet been brought to the country.

To protect the falling trend of the country’s foreign exchange reserve, the central bank in July last year took a series of initiatives including a 100% cash margin for opening LCs on cars, electronics, gold, precious metals, RMG, and pearls, among other items.

At the same time, the BB asked banks to inform it 24 hours before opening an import LC worth $3 million or above.

Those initiatives impacted LC opening, which fell by 22.52 percent to $34.10 billion during July to December period of this fiscal year.

Also, back-to-back LC opening fell by 32.82 per cent to $4.4 billion in this period, the central bank data shows.