BRPD Circular Letter No. 19: L/C Margin on Import Financing

Bangladesh Bank Head Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD Banking Regulation and Policy Department 20 June 2023 BRPD Circular Letter No. 19 Date: ---------------- 06 Asharh 1430 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh. Dear Sir, Regarding the preservation of cash margin in the context of establishing import financing letters of credit.

1. Reference is drawn to your attention to BRPD Circular Letter No. 25 dated 04 July 2022 on the subject cited above.

2. Through the aforementioned circular letter, instructions have been issued regarding the determination of the cash margin rate for establishing import financing letters of credit, in the context of the neighboring country's economic instability, with the aim of maintaining a more cohesive currency and credit management system in the country.

3. Commercial importers in the Cottage, Micro, Small and Medium Enterprises (CMSME) sector import certain important goods necessary for the expansion of business in the relevant sector, which play a notable role in the economy along with increasing economic flow. In view of this, it is hereby instructed that cash margin preservation rates for establishing import financing letters of credit for the following goods imported by CMSME and other sectors' commercial importers may be determined based on the bank-client relationship:

(a) Spare parts of industrial machinery; (b) Raw materials, chemicals and ancillary products of textiles; (c) Plastic and packaging items and their raw materials; (d) Medical equipment, accessories and reagents; (e) Spare parts and ancillary products of UPS/IPS; (f) Safety-related products; (g) Supplementary hardware products of locally manufactured construction-related products, steel sheets, H-beams, etc.; (h) Computers/laptops and their spare parts; (i) Information-communication technology, internet, cyber security-related hardware products; (j) Spare parts of vehicles, tires, tubes and other related ancillary products.

4. In addition, other instructions of BRPD Circular Letter No. 25/2022 shall remain unchanged.

5. These instructions shall take immediate effect and remain valid until further instructions are issued.

6. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991.

Yours faithfully, (Md. Ali Akbar Farazi) Director (BRPD) Phone: 9530252