BRPD Circular Letter No. 01: L/C Margin for Importing Car

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD Banking Regulation and Policy Department 02 January 2025 BRPD Circular Letter No.-01 Date: ------------------ 18 Poush 1431 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh Dear Sir, Regarding the maintenance of cash margin in the establishment of Letter of Credit for the import of cars/automobiles

1. Reference is invited to BRPD Circular Letter No. 41 dated 05 September 2024 on the subject cited above.

2. Through the aforementioned circular letter, instructions were issued to maintain a 100% cash margin for the establishment of letters of credit for the import of motor vehicles (sedans, jeeps, hatchbacks, etc.) along with several other products, with the aim of keeping the country's currency and credit system more consolidated.

3. Considering fuel efficiency and environmental friendliness, the use of fully electric and hybrid cars is being given policy priority worldwide. In this densely populated country, such modes of transport can play a role in reducing carbon emissions and improving the Air Quality Index (i.e., AQI).

4. Considering the relevant matters, instructions have been issued to maintain cash margin for the establishment of letters of credit for the import of fully electric and hybrid motor vehicles based on bank-customer relationships. However, a minimum 50% cash margin must be maintained for the establishment of letters of credit for the import of other motor vehicles (sedans, jeeps, hatchbacks, etc.) excluding fully electric and hybrid motor vehicles.

5. Furthermore, other instructions of BRPD Circular Letter No. 41/2024 will remain unchanged.

6. These instructions will come into effect from 01 February 2025.

7. These instructions are issued under the powers conferred by Section 29 of the Bank Companies Act, 1991.

Yours faithfully, (Mohammad Shahriar Siddique) Director (BRPD) Phone: 9530252