Bangladesh Bank eases import rules for textile raw materials

22 Jun '23

1 min read

Pic: Shutterstock/whitemaple

Insights

The Bangladesh Bank has advised banks to reduce the cash margin rate for LCs on products including textile raw materials.
The policy mandates the opening margin rate to be based on the banker-customer relationship, shifting from the previous 75 per cent LC margin requirement.
Banks are allowed to import more items based on the banker-customer relationship.

To facilitate easier importation of specific goods, the Bangladesh Bank (BB) has directed all banks to relax the cash margin rate related to the initiation of import letters of credit (LCs) for 10 types of products, among which are textile raw materials.

A recently issued BB circular stated that the directive stipulates that banks should determine the opening margin rate based on their relationship with the customer. This is a departure from the previous requirement where importers had to pay a 75 per cent LC margin on imports of these goods, according to local media reports.

The central bank’s new regulations apply specifically to the designated product categories. For other imports, LC margins of 75 per cent and 100 per cent remain applicable.

The circular further states that banks currently have the flexibility to import several other products based on the banker-customer relationship. These products encompass items including fuel, imported capital machinery, and raw materials for local, export-oriented industries.

Fibre2Fashion News Desk (NB)

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