LC margin rules relaxed to ensure Ramadan supply stability

Bangladesh Bank (BB) has eased the letter of credit (LC) margin requirements to ensure adequate supply and price stability of key essential commodities during the upcoming month of Ramadan.
In a circular issued on Tuesday, the central bank instructed commercial banks to keep the cash margin rate at the minimum level when opening LCs for importing essentials ahead of Ramadan, which is expected to begin in mid-February next year.
The relaxed LC margin facility will remain effective until March 31, 2026, according to the circular. The commodities covered under this facility include rice, wheat, onion, lentils, edible oil, sugar, chickpeas, peas, spices, and dates -- items whose demand typically surges during the fasting month.
Under the directive, banks have been allowed to set the LC margin at their discretion based on the banker-customer relationship, instead of maintaining a fixed percentage.
Earlier, importers were required to maintain a 100-percent cash margin for LCs against imports of certain products. Considering market demand, the central bank later introduced flexibility based on banker-client relationships, which remained effective until March 31 last.

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