Banks advised to encourage traders for opening LCs before Eid, Puja

Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has advised the commercial banks to encourage businessmen for opening fresh letters of credit (LCs) for import of essential items ahead of the Eid-ul-Azha and Durga Puja festivals, officials said.

 

“The central bank has sent a letter to all 47 scheduled banks in this connection,” a senior official of Bangladesh Bank (BB) said, adding that the banks have been advised to take necessary measures to keep stable the prices of essential items by ensuing adequate supply of the essential consumer goods ahead of the two major festivals.

 

The BB’s latest move came against the backdrop of declining trend of overall imports in the recent months as the central bank maintains a ‘cautious’ monetary policy to contain the inflationary pressure on the economy.

 

“We’ve been informed that some banks are showing a reluctant attitude towards opening fresh LCs for imports, particularly for small and medium importers,” another BB official said, adding that the banks have taken a number of precautionary measures to avoid any unwanted incidents after the Hallmark loan scam.

 

“The BB has already asked the banks not to harass the businesses while rendering services to them,” the central banker said, adding that the clients have been advised to contact the central bank in case of harassment by any banks.

 

Opening of LCs against imports, generally known as import orders, decreased by over 13 percent to US$ 2.488 billion in August last from $2.865 billion in the previous month, according to the central bank statistics.

 

On the other hand, the settlement of LCs, generally known as actual imports, also dropped by over 12 percent to $2.482 billion in August 2012 from $2.836 billion in the previous month.

 

“Such declining trend is still continuing this month. So the central bank has advised the commercial banks for taking measures to expedite the imports of different items including fine rice, wheat, edible oil, milk food and spices to meet the growing demand for the essentials in the local market,” the central banker said.

 

BBN/SSR/AD-02Oct12-10:20 am (BST)