Bangladesh Bank (BB) has asked banks to open letters of credit (LC) for importing essential commodities to ensure stable supply in Ramadan at a minimum margin.
The banking regulation and policy department of the central bank on Sunday issued a circular in this regard and sent it to the top executives of the scheduled banks with immediate effect.
The financial sector regulator has issued the directive to regulate prices and ensure enough supply of essential commodities such as edible oil, chickpeas, pulses, peas, onions, spices, sugar and dates during Ramadan, reports UNB.
According to the directives, the rate of cash margin is to be reserved for import letters of credit (LC) of products.
They issued the directive after recent meetings with trade bodies and the Ministry of Commerce. The business leaders have demanded that authorities allow them to open LC easily.
The Bangladesh Bank tightened the LC opening to check unnecessary imports amid the foreign exchange crisis in the domestic market.
Besides, the central banks also looked into the LC prices of goods, and whether it is arriving in the country at a due time or not because Bangladesh Financial Intelligence Unit (BFIU) and the BB in an investigation found that some traders smuggled money into the name of imports.
In some cases, the traders raised the price of goods from 20 per cent to 200 per cent in January-June this year. As a result, the central bank imposed strict monitoring on the LCs to protect against over-invoicing and under-invoicing.