Dhaka, Bangladesh (BBN)- The advent and continuing challenges of the financial crisis has seen a dramatic increase in payment defaults and discrepancies leading to disputes between trading partners in international trade, said ICCB President Mahbubur Rahman said on Wednesday.
The ICCB chief said this while inaugurating the daylong workshop on International Trade Finance: Cases-Analysis and Solutions organized by the International Chamber of Commerce Bangladesh (ICCB) in Dhaka on Wednesday.
This increase in risk has seen a surge in returning to the use of the traditional trade finance instruments such as commercial letters of credit and standby letters of credit by the parties.
According to the recently published global survey ‘Rethinking Trade Finance 2010’on trade finance by the World Trade Organization (WTO), 34 percent of respondents had seen an increase in refusals, 44 percent had seen an increase in claims under standby LC’s, 23 percent of respondents (up from 12 percent in 2009) had experience an increase in the number of court injunctions stopping payment under bank undertakings and 73 percent of respondents experienced increases in confirmation, he added.
Chairman of ICCB Standing Committee on Banking Technique and Practices Mamun Rashid in his welcome address said that presently more than 80 percent transactions are made through open ended L/Cs. So he hoped that Bangladeshi exporters within the shortest possible time will be able to follow the international practice.
Mr. Vincent O’Brien, visiting expert who conducted the workshop also spoke on the occasion. A total of 109 participants from banks, financial institutions and export oriented industries attended the workshop. The second workshop on the same topic will be held in Chittagong on March 10, where some 45 participants are expected to attend.
BBN/SSR/AD-09Mar11-9:50 pm (BST)
