Counter-guarantees on two SoCBs extended by one yr

The government has extended the duration of two counter-guarantees on two state-owned commercial banks (SoCBs), Sonali Bank and Janata Bank, funding worth Tk 50 billion by one year to ensure uninterrupted import of fertilisers, officials said.
The ministry of finance (MoF) issued an instruction last Sunday for extending the life two counter-guarantees in favour of the two state-owned banks for financing the import of Triple Super Phosphate (TSP), Diammonium Phosphate (DAP) and Muriate of Potash (MOP) by Bangladesh Agricultural Development Corporation (BADC), they said.
The state entity had sought to extend the tenure of the guarantees to June 30, 2016 from June 30, 2015 to continue fertiliser import smoothly, sources concerned said.
Meanwhile, the tenure of the counter-guarantees expired on June 30, 2015.
The amount of the existing counter-guarantees is Tk 25 billion each for Sonali Bank and Janata Bank, according to the BADC data.
Loans under the new counter-guarantees will be used for importing fertilisers after paying all kinds of dues against previous counter-guarantees to the banks concerned.
The government had set a target to import 1.8 million tonnes of urea fertiliser for the last fiscal year (FY), 2014-15. However, the government is yet to fix the target for the current FY.
More than 80 per cent of the country's fertiliser demand is met through imports.
There is an annual demand for around 5.0 million (50 lakh) tonnes of fertilisers for farming in the country.  
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