No LC margin bar for 6 crisis-hit banks

Staff Reporter :

Bangladesh Bank has removed the 100 percent margin requirement for opening letters of credit, or LCs, for five Shariah-based banks and one commercial bank. However, other restrictions will remain effect.

From now on, these banks will no longer be required to maintain a 100 percent margin when opening LCs, a requirement that had been made mandatory in August this year.

The central bank announced the decision in a letter sent to the banks on Thursday.

The banks include Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank.

These banks’ boards were previously dominated by the controversial business conglomerate, S Alam Group.

Bangladesh Bank Executive Director and Spokesperson Husne Ara Shikha informed the media “The 100 percent margin requirement for opening LCs has been withdrawn for these banks.” However, restrictions on other activities would remain, she said.