Bangladesh Bank has given stricter conditions to discourage imports. The cash deposit rate at the time of opening of import bonds has been increased. Under the new terms, from now on, a 100% cash margin will have to be saved to open a bond for the import of luxury goods. Till now, the margin had been 75%. In the case of other LCs, the margin rate has increased from 50% to 75%. At the same time, the cash margin of the import LC has to be paid from the client’s own money; therefore, no bank loan will be available.
On Monday (4 July) night, the ‘Banking Regulation and Policy’ Division of Bangladesh Bank issued a circular with instructions in this regard. However, credit for imports of essential food items including baby food, fuel, essential food products, life-saving medicines, and local and export-oriented industrial and agricultural related products will be excluded from the guidelines.
The new directive, sent to banks’ managing directors and chief executives, says the cash margin rate has been rescheduled for setting up of import bonds to strengthen the country’s currency and debt management in the face of the ongoing global economic instability due to the long-term adverse effects of COVID-19 and the prolongation of the war abroad.
The new guidelines state that for import bonds of motorcars (sedans, SUVs, MPVs, etc.), electrical and electronic home appliances, gold and gold ornaments, precious metals and pearls, ready-made garments, leather products, jute products, cosmetics, furniture and ornaments, fruits and non-cereal foods such as non-grain foods, processed foods, and beverages such as canned food, chocolates, biscuits, juices, soft drinks, alcoholic beverages, tobacco including tobacco products or alternative products, etc., 100% cash margin should be saved.
On the other hand, a 75% margin should be maintained for bonds of non-essential products. However, no margin needs to be maintained for baby food, essential food products, fuel, life-saving medicines, and equipment recognised by the Department of Health used in medical work, medical equipment, directly imported capital equipment, and raw materials for local manufacturing industries and export-oriented industries, agro-related products and essential products for use in government priority projects.
The directive further said that the required margin has to be paid from the client’s source as opposed to setting up bonds for imported goods at 100% and 75% margins. The concerned bank will not be able to give any loans to the importer for cash margin.
