Banks asked to keep minimum LC margin for rice, wheat import

Staff Reporter :
The Bangladesh Bank (BB) on Wednesday has instructed the banks to keep a minimum LC margin (cash advance) for importing rice and wheat, in order to keep their market prices at a tolerable level ahead of the holy month of Ramazan.
The demand for edible oil, lentils, onion, spices and dates usually goes up during Ramazan. As a result, the prices of the items also increase.
However, the Banking Regulation and Policy Department of Bangladesh Bank issued a circular in this regard – with immediate effect – on Wednesday and sent it to top executives of all banks in the country.
The circular instructed that banks should kept LC margin at the minimum level, depending on the bank-client relationship. ‘Rice, wheat and crops prices are seeing an upward trend, owing to the disruption in the global supply chain caused by the Russia-Ukraine war. As a result, the transport cost of global commodities has gone up, affecting prices in the local market,’ the central bank circular added.
To keep the import and supply channel smooth for rice and wheat, Bangladesh Bank asked banks to keep a minimum LC margin.
The central bank also directed banks to take a minimum cash advance from importers while opening LCs for a number of essential commodities in order to keep their prices at a tolerable level during Ramadan.