LC margin eased for importers serving SMEs
Bangladesh Bank (BB) today relaxed rules regarding financing availed by commercial importers to cater to cottage, micro, small and medium enterprises (SMEs), aiming to accelerate growth of industries and jobs.
Banks will be able to fix the amount of down payment or margin for opening letters of credit (LCs) based on their relation with importers, said the central bank in a circular.
Around a year ago the central bank had imposed a 75 per cent cash margin for opening LCs for the import of machineries, spare parts, textile and chemical raw materials of plastic and packaging items and medical equipment.
Commercial importers serving the cottage, micro, SMEs were under its purview, which was brought about in an effort to reduce pressure on the country's foreign exchange reserves and contain volatility in the exchange rate of taka against the US dollar.
A senior BB official said the restriction was hampering imports and growth of the enterprises, which play a vital role in industrialisation and job creation.
"So, we have relaxed the rule to facilitate industrial growth. Now, banks based on their relation with clients, will determine the rate of LC margin for commercial importers who import industrial items," he said.
The relaxation can be availed by importers of parts and related materials for uninterruptable power supply or instant power supply, security related items, steel sheets and other goods for construction industries.
Traders importing computers, laptops and their parts, ICT and cyber security related products and spare parts, tyre, tube and other related items will also be able to avail the facility.