Unusual delay in L/C payment

IT is often found that most of our banks do not release payment against letter of credit (L/C) in due time as a result of which business activities get slowed down. As business people cannot be sure about the time of receiving payment against L/C from the local banks, the process of payment for principal/supplier gets delayed which may put our business in jeopardy. Concerned banks also lose their reputation in the international market. I had a bad experience of receiving payment against many L/Cs more than a month later and had a feeling of deep frustration in such cases.

I think Bangladesh bank should intervene and make sure that payments against L/Cs are made promptly. The central bank should also install an effective system to closely monitor the payment by AD (authorized dealer) bank branch so that business people are not harassed by their counterparts abroad. It is easy for an importer to release his/her import payment on time if payment against L/Cs is promptly made by the issuing banks. Payments of international banks on the contrary are regular and prompt and we do not have to face similar problems. I do not understand why the payment system of a local bank cannot be as good as a foreign one. It is the uncaring attitude of most banks which is responsible for the phenomenon. All in all, delay in payment of L/C money is creating an unnecessary hindrance to development of business and we must come out of such a bad tradition as quickly as possible.

Asif Khaled

Sutrapur, Dhaka