BB allows 90-day credit facility for imports of 11 essentials ahead of Ramadan

The Bangladesh Bank has allowed importers to bring in 11 essential commodities on up to 90 days’ deferred payment terms ahead of Ramadan to ensure adequate supplies and help keep prices stable during the holy month.

The central bank issued a circular on Wednesday, allowing the facility for imports of rice, wheat, onions, pulses, soybean oil, palm oil, sugar, chickpeas, spices, dates and peas.

Under the arrangement, importers can defer payments for up to 90 days under either suppliers’ credit or buyers’ credit facilities.

This means importers will not have to pay the full import value immediately after the arrival of goods in the country. Instead, they can sell the imported products before settling their payment obligations within the stipulated period.

The facility is expected to ease working capital pressures on importers and encourage them to increase imports of essential commodities ahead of Ramadan, when demand for food items generally rises.

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According to Bangladesh Bank, the special facility aims to ensure an uninterrupted supply of essential food items and keep prices at affordable levels during Ramadan. It will remain effective until 15 March next year.

Banking sector insiders believe the deferred payment facility could help importers manage their cash flow more efficiently and facilitate timely imports, particularly as demand for essential commodities rises ahead of Ramadan.

Earlier, on 8 November, Bangladesh Bank instructed banks to keep cash margins on letters of credit (LCs) for importing the same 11 commodities at the minimum level, based on the banker-customer relationship.

An LC margin is the amount of cash or security an importer must deposit with a bank when opening an import letter of credit. It is generally calculated as a percentage of the total LC value.

A lower or minimum margin requirement allows importers to open LCs by depositing less upfront cash, reducing their immediate financing burden and facilitating imports.