Importers of fruits will now face less pressure when opening letters of credit (LCs), as Bangladesh Bank has withdrawn the mandatory 100 percent cash margin requirement for fruit imports.
Under the new arrangement, banks will decide the required cash margin based on their relationship with individual customers, according to a circular issued by the central bank on Monday.
The move is intended to increase fruit supplies, help keep prices affordable and promote competition in the market, while ensuring access to nutritious food, Bangladesh Bank said.
The 100 percent cash margin requirement had been introduced for certain luxury goods and import-substitute products amid global economic uncertainty as part of measures to strengthen currency and credit management.
Fruit imports were later brought under the same requirement.
Bangladesh Bank said fruits are an important part of a healthy diet, particularly for children, patients, elderly people and pregnant women.
The central bank said conditions in the country’s foreign exchange market and transactions have gradually improved, reducing the need to maintain the full cash margin for fruit imports.
Banks have therefore been instructed to assess the margin requirement for each fruit import LC according to their banker-customer relationship rather than applying a fixed 100 percent rate.
All other instructions issued in previous circulars on the issue will remain unchanged, the central bank said.
The new directive was issued under Section 29 of the Bank Company Act, 1991, and took effect immediately.
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