LC restrictions on crisis-hit banks to be lifted

Business Report :

The Bangladesh Bank (BB) has decided in principle to withdraw the restrictions on opening letters of credit (LCs) by six crisis-hit banks, according to officials.
The measure, which was imposed in August this year, prevented banks from opening LCs only by keeping a 100 per cent margin.
The development came following a meeting at the Bangladesh Bank headquarters recently between officials of the ailing banks and central bank officials.
Bangladesh Bank Governor Ahsan H Mansur presided over the meeting while Nurun Nahar, Md Habibur Rahman and Md Kabir Ahmed, deputy governors of the central bank, were also present.
On the other hand, the managing directors and chairman of Bangladesh Commerce Bank, Padma Bank, Union Bank, Social Islami Bank, First Security Islami Bank, and ICB Islami Bank were present.
After the political changeover on August 5, all six lenders except Padma Bank saw their boards reconstituted.
The six banks also requested the central bank to quickly process liquidity support, which is being offered through the inter-bank money market.
They also urged the central bank to intervene and reduce the profit rates that they were being charged for availing liquidity support.
In response, central bank officials said that the rate was determined by the market and that the regulator would not intervene in this regard.