Banks renuctant to open LC due to dollar crisis

Staff Reporter :
Most of the banks in the country are reluctant to open letter of credit (LC), for import of commodities due to dollar crisis, but luxurious and costly foreign trips have increased.
Sources said that banks expressed their inability to open LCs even of two to three lakh dollars.
But surprisingly, costly business classes of different air lines’ foreign bound planes are not found empty from Bangladesh amid the serious dollar crisis.
Destinations of most of those luxurious passengers are in different countries of Europe and America.
Sources said that number of passengers of luxurious trips have increased in the last one year in Bangladesh in spite of dollar crisis and doubled of air fares.
In addition, several airlines’ have introduced more costly seats for Bangladeshi plane passengers.
Among those, Emirates and Kuwait airlines started keeping first class seats in several of their trips from Bangladesh in recent days.
Besides, Qatar Airways added ‘Qsuite’ services which is more luxurious than first class.
The foreign airlines have introduced all of those costlier services recently for Bangladeshi rich passengers.
“Pressures from Europe and America bound passengers are increasing in recent months most of those are travelling in those countries as tourists,” said Sohel Majid, Chief Operating Officer of Share Trip, an online travel agency.
Those passengers have used to take huge amount of dollars along with them during those trips.
As a result the dollar crisis in the market is increasing day by day.
According to the information of Share Trip air fare from Dhaka to New York in economy class is Tk 80 thousands while it will
cost Tk four lakh and 18 thousand in business class.
Meanwhile, the first class tickets of the same plane needed Tk five lakh 70 thousand.
The foreign airlines’ increased their trips from Bangladesh due to increasing pressures of passengers.
Besides, they increased costly seats as the numbers of rich passengers are on rise.
Bank sources said that there is no statistics about how much dollars have been taken by the foreign bound passengers. But the increasing number of costly seats foreign bound tourists made crisis of dollars in kerb markets.
They said that the exchange rate of dollars in bank sector is Tk 108, while it is being exchanged in kerb markets above Tk 115. In these circumstances, illegal hundi business increased. A big portion of remittances are coming through hundis.
A top executive of a private bank said preferring anonymity that most of the luxurious passengers of the planes laundered huge amount of money using their import businesses as a tool.
Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank said that they have stopped opening of LCs due to acute crisis of dollars.
Syed Mahbub said that about 70 pc of his bank’s dollar comes through remittances. But the remittance inflow has decreased seriously in recent months which created dollar crisis. As a result, the MD said that they have imposed restrictions on opening LCs.
“If any LC topped two lakh dollars or more, it has been made compulsory to take certificate from treasury department of the bank,” the MD said.
Top officials of about dozens of private banks expressed similarly about their struggle in dollar crisis.
Data from Bangladesh bank showed that the banks have nearly halved their LCs after creating dollar crisis.
The central banks data showed that the banks opened LC about USD 980 crore in March while it has been lowered by USD 570 crore in September this year.