BB amends circular on Inland Bill purchase
Monday, 10 September 2012
Rezaul Karim
The banks are now allowed to issue bills of acceptance against local letters of credit (LCs) or make payment for purchase of goods under the relaxed conditions.
The concerned banks will, however, have to ensure that such purchases are actual, not fake.
This was decided by the Bangladesh Bank (BB) at a meeting with the executives of all banks Sunday at its head office.
The BB issued a fresh circular after bringing some changes to its earlier one which was issued on July 11, 2012.
By that circular, the central bank had instructed the banks not to issue any bill of acceptance against local letters of credit (LCs) or make payment without physical verification of the goods purchased.
At the request of exporters as well as bankers, the central bank effected the change following the meeting with the bankers. The BB deputy governor (DG) S K Sur Chowdhury was in the chair.
However, the banks under Sunday's amended circular will require to continue obtaining prior approval from their respective head offices instead of taking branch-level decision on inland bill purchase (IBP) in both foreign and local currencies.
The officials of the commercial banks in the meeting demanded withdrawal of the provision for pre-inspection of goods being exported after approval of bills of acceptance against the LCs.
It is not possible to inspect the export item in every shipment due to banks' shortage of manpower, they said.
"We are concerned over the IBPs. The Hallmark scam has affected 59 branches of 26 banks. The BB has been taking necessary steps in this regards," deputy governor Sur Chowdhury told the meeting.
A number of trade bodies lodged complaints with the BB in the wake of an earlier directive by the latter that the banks were not providing acceptance bills for inland documentary bill purchases due to the BB's tough position in this regard, and businesses have been facing problems for that reason, the DG said.
Mr. Chowdhury said the commercial banks can now approve the bills of acceptance if they ensure that the LC documents of the products being supplied, were not fake.
"The banks will have to take all the liabilities if they approve any acceptance bills which are found fake," said Mr. Chowdhury.
Mr. S. K. Sur said the approval of acceptance bills from the banks' head office is not a permanent arrangement.
The BB will change its stance on this matter when discipline will be effectively enforced in the banking sector, he said.
The BB had issued the earlier directive in the wake of the Hallmark scam.
The banks are now allowed to issue bills of acceptance against local letters of credit (LCs) or make payment for purchase of goods under the relaxed conditions.
The concerned banks will, however, have to ensure that such purchases are actual, not fake.
This was decided by the Bangladesh Bank (BB) at a meeting with the executives of all banks Sunday at its head office.
The BB issued a fresh circular after bringing some changes to its earlier one which was issued on July 11, 2012.
By that circular, the central bank had instructed the banks not to issue any bill of acceptance against local letters of credit (LCs) or make payment without physical verification of the goods purchased.
At the request of exporters as well as bankers, the central bank effected the change following the meeting with the bankers. The BB deputy governor (DG) S K Sur Chowdhury was in the chair.
However, the banks under Sunday's amended circular will require to continue obtaining prior approval from their respective head offices instead of taking branch-level decision on inland bill purchase (IBP) in both foreign and local currencies.
The officials of the commercial banks in the meeting demanded withdrawal of the provision for pre-inspection of goods being exported after approval of bills of acceptance against the LCs.
It is not possible to inspect the export item in every shipment due to banks' shortage of manpower, they said.
"We are concerned over the IBPs. The Hallmark scam has affected 59 branches of 26 banks. The BB has been taking necessary steps in this regards," deputy governor Sur Chowdhury told the meeting.
A number of trade bodies lodged complaints with the BB in the wake of an earlier directive by the latter that the banks were not providing acceptance bills for inland documentary bill purchases due to the BB's tough position in this regard, and businesses have been facing problems for that reason, the DG said.
Mr. Chowdhury said the commercial banks can now approve the bills of acceptance if they ensure that the LC documents of the products being supplied, were not fake.
"The banks will have to take all the liabilities if they approve any acceptance bills which are found fake," said Mr. Chowdhury.
Mr. S. K. Sur said the approval of acceptance bills from the banks' head office is not a permanent arrangement.
The BB will change its stance on this matter when discipline will be effectively enforced in the banking sector, he said.
The BB had issued the earlier directive in the wake of the Hallmark scam.