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Bangladesh Bank has relaxed the cash margin requirement for opening letters of credit (LCs) for fruit imports, replacing the existing 100 percent mandatory margin with a rate to be determined by banks based on their relationship with customers.
The central bank issued the directive in a circular on Sunday, saying the move aims to facilitate fruit imports, ensure adequate supplies at affordable prices and promote a competitive market while considering public health and nutritional needs.
The 100 percent cash margin requirement for certain luxury goods and import-substitute products was introduced amid global economic uncertainty as part of measures to strengthen foreign exchange and credit management. Fruits were also included in the list of products subject to the mandatory margin.
Bangladesh Bank noted that fruits are an important source of nutrition, particularly for children, patients, elderly people and pregnant women.
The central bank said foreign exchange stability and transactions in the country have gradually improved, reducing the need to maintain a 100 percent cash margin for fruit imports.
Under the new directive, banks will determine the required cash margin for fruit import LCs based on their banker-customer relationships rather than applying a fixed rate.
Bangladesh Bank said all other instructions issued under previous circulars on the matter would remain unchanged.
The directive, issued under Section 29 of the Bank Company Act, 1991, took effect immediately.