Previously, in early September this year, the Bangladesh Bank had waived the 100% LC cash margin on all types of import, except for some luxury items

Bangladesh Bank Eases LC Cash Margin to Ensure Fertiliser Supply and Stabilize Prices

In an effort to ensure an adequate supply of fertilisers and maintain price stability, Bangladesh Bank has issued new guidelines to keep the letter of credit (LC) cash margin at a minimum level, depending on the relationship between banks and their customers. This directive, announced on Wednesday by the central bank’s Banking Regulation and Policy Department, aims to ease the process for importers as fertiliser demand is set to increase with the upcoming crop season.

Earlier, in September, Bangladesh Bank lifted the 100% LC cash margin requirement on most imports, excluding luxury items, providing flexibility for various sectors.

“There is an opportunity to adjust cash margins based on a banker-customer relationship when opening LCs, except for specific products,” noted the central bank in the September directive.

Commenting on the recent move, a senior official from Bangladesh Bank explained that the new instructions allow banks to streamline LC processes, making it easier for importers to bring in essential fertilisers in time for the high-demand season. This approach aims to support both supply and price stability for fertilisers in the agricultural sector.