The ministry of finance (MoF) is considering extending timeframe of the existing counter guarantees of the Bangladesh Chemical Industries Corporation (BCIC) aiming to ensure uninterrupted import of fertiliser in the country, officials said.
The BCIC has recently sought to extend the tenure of the five state-owned banks' counter guarantees by one year, they said.
The MoF is working on the BCIC issue; but it will take time to extend the deadline of the guarantees due to the upcoming budget, an MoF official said.
Some Tk 48 billion is involved against the counter guarantees. The MoF was issued counter guarantees against the loans of Sonali Bank, Janata Bank, Krishi Bank, BASIC Bank and Rupali Bank in September, 2014. The tenure of the guarantees will expire on June 30, 2015.
The state entity has sought to extend the tenure of the guarantees to June 30, 2016 to continue fertiliser import smoothly.
The amounts of existing counter guarantees are Tk 30 billion, Tk 10 billion, Tk 4.0 billion, Tk 2.0 billion and Tk 2.0 billion of Sonali Bank, Janata Bank, Krishi Bank, BASIC Bank and Rupali Bank respectively, according to the BCIC.
"It will not be possible to open letter of credit (L/C) for importing fertiliser for the next fiscal year if the time of existing counter guarantees is not extended by one year," a high official of the BCIC told the FE.
The BCIC has set a target to import of 2.1 million tonnes of urea fertiliser for the current fiscal year. Of the amount, the state entity has opened letter of credit (L/C) to import over 1.8 million tonnes of urea fertiliser.
A liability worth Tk 63.34 billion has been created to the banks over import of more than 1.8 million tonnes of urea fertiliser. Of the amount, Tk 29.59 billion has been provided to the banks concerned against the liability.
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MoF mulling tenure extension of counter guarantees of BCIC
FE Report | Published: May 28, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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