Regulatory Alerts2022-05-10
Added
BRPD Circular Letter No. 14: L/C Margin on Import Financing
The document redefines cash margin requirements for import Letters of Credit, mandating a minimum 75% margin for motor cars and home appliances/electronics, and a 50% margin for all other goods excluding specific priority sectors such as baby food, fuel, life-saving medicines, capital machinery for local/export industries, agricultural products, and items for government-priority projects. This directive explicitly revokes the previous instruction issued in BRPD Circular Letter No. 10 dated April 11, 2022. The new margins take immediate effect and remain valid until further notice.
Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. Ref No.: BRPD-14 May 10, 2022 BRPD Circular Letter No.-14 Date: ------------------- 27 Baisakh 1429
Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh.
Dear Sir,
Regarding Cash Margin Maintenance in Establishment of Import Letters of Credit.
Reference is invited to your attention regarding BRPD Circular Letter No.-10, dated: April 11, 2022 and BRPD Circular No.-23, dated: December 02, 2003.
- Through BRPD Circular Letter No.-10/2022, instructions were given to maintain a minimum cash margin rate of 25 percent for establishment of Letters of Credit against import of all goods except import related to baby food, fuel and other essential food items, life-saving drugs, local and export-oriented industries and agriculture sector. In view of the global economic instability created due to the impact of Covid-19 and war situation in the outside world, it is hereby instructed to redefine the cash margin rate for establishment of import Letters of Credit as follows to keep the country's currency and credit management more consolidated:
a) A minimum cash margin of 75 percent must be maintained for establishment of Letters of Credit for import of Motor Cars (Sedan Cars, Hatchbacks etc.), Electrical and Electronic items used as Home Appliances;
b) A minimum cash margin of 50 percent must be maintained for establishment of Letters of Credit for import of all goods except baby food, essential food items, fuel, life-saving drugs and instruments recognized by the Directorate General of Health Services, items used for medical work, directly imported capital machinery and raw materials for production-oriented local industries and export-oriented industries, products related to the agriculture sector, and essential goods imported for use in government priority projects.
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With the issuance of this instruction, the instructions contained in BRPD Circular Letter No.-10, dated: April 11, 2022 are hereby revoked.
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This instruction shall come into force immediately and shall remain in force until further instruction is issued.
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This instruction is issued under the powers conferred by Section 45 of the Bank Company Act, 1991.
Yours faithfully,
(Maksuda Begum) General Manager Phone: 9530252