Lubricant import LCs to require minimum advance

Bangladesh Bank yesterday asked banks to take a minimum cash advance from importers while opening letters of credit (LCs) for lubricant and engine oil in order to enable running the operations of industries smoothly. 

The advance payment, also known as the cash LC margin, should be kept at the minimum level for the products depending on the bank-client relationship, Bangladesh Bank said in a notice.

The importers of the raw materials of lubricant and engine oil will also enjoy the facility.

The central bank in the circular said the initiative would help run the production of industrial goods and electricity in a smooth manner.

In July, the BB asked banks to take up to 100 per cent of import payments in advance from businesses while opening LCs for luxury and non-essential items, all in an effort to keep the foreign exchange reserves stable.

The reserves fell from $39.60 billion in July to $34.01 billion as of December 22.