Many banks ignore verification requirement of licence

Most private sector importers of petroleum products and banks concerned are allegedly not complying with a necessary provision in opening L/Cs (letters of credit) to import the same.
Taking their non-compliance into account, the Bangladesh Energy Regulatory Commission (BERC) has sought necessary steps from the Bangladesh Bank (BB) in this connection.
For import of petroleum products, the relevant importers are required to procure licences from the BERC.
But the BERC noticed that only a few banks were verifying the licences while opening L/Cs for import of petroleum products.
According to the existing provision, banks are bound to examine the licences issued by the BERC before opening L/Cs for import of any petroleum items.
"You are requested to issue necessary directives to the relevant banks so that they abide by the existing provision relating to checking the licences while opening L/Cs for petroleum product import," the BERC said in a letter to the central bank governor.       
When asked, BERC Secretary Md Habibur Rahman said: "We have sought the BB governor's intervention with regard to the issue."
The Section 27(1) of the Bangladesh Energy Regulatory Commission Act, 2003 says: "No person shall engage himself in the following business unless he is empowered by a licence or exempted from having it under this Act or any other Act, such as:-(a) power generation;(b) energy transmission; (c) energy distribution and marketing; (d) energy supply; and (e) energy storage."
Besides, the section 28 of the Act says "A licence may be issued to any person for the following purposes in a procedure prescribed by the commission, such as:- (a) for power generation; (b) for energy transmission; (c) for distribution and marketing of energy; (d) for supply of energy; and (e) for storage of energy."
On the other hand, the section of 26 (25) of the Import Policy Order 2012-2015 states "Petroleum oil & all kinds of oil obtained from bituminous mineral crude - HS Petroleum Oil (HS code No 27.09.00 under HS heading No 2709) are importable by Bangladesh Petroleum Corporation. However, in private sector, it is importable with the approval of the Ministry of Power, Energy & Mineral Resources and prior permission from the Ministry of Commerce and a private sector importer is to have a licence from the Energy Regulatory Commission as per Energy Regulatory Commission Act, 2003."
According to the sub section 27 © of the order, "The private sector importers shall have licences from the Energy Regulatory Commission according to Energy Regulatory Commission Act, 2003."
"Liquefied Natural Gas (LNG), liquefied Propens & Butanes (HS Code Nos 2711.11.00, 2711.12.00 & 2711.13.00 of HS Heading No 27.11) are importable on private basis, but the private sector importers shall have licences from the Energy Regulatory Commission according to Energy Regulatory Commission Act, 2003," the order mentioned.
Earlier through a circular, the central bank asked all the scheduled banks to examine the licences of petroleum product importers issued by the BERC when they open L/Cs. But majority of the banks are not complying with the directive. They rampantly issue L/Cs in favour of the importers in breach of the relevant provision of the Act and directives, sources concerned said.
There are over 255 petroleum product importers in the country as of April last. They import lube oil, furnace oil, bitumen, paraffin and other petroleum products, according to a director of the BERC.
When contacted, Chairman of the Association of Bankers, Bangladesh Limited and Managing Director and CEO of Eastern Bank Ltd Ali Reza Iftekhar said he does not know what the banks concerned do with regard to opening L/Cs for importing petroleum products.
"This is a matter of respective banks," he added.
    [email protected]