BB eases LC cash margin for Ramadan essentials

The Bangladesh Bank (BB) has directed commercial banks to keep the cash margin for opening import letters of credit (LCs) for a set of essential food items at the minimum level ahead of Ramadan.

In a circular issued yesterday, BB said the minimum margin should be applied based on the relationship between the bank and its customer.

A cash margin is the portion of an LC’s value that an importer must deposit upfront with the bank when opening the LC. A lower margin reduces the upfront funds importers need to tie up.

The items covered are rice, wheat (flour), onion, lentil, edible oil (soybean and palm oil), sugar, chickpea, peas, spices and dates.

The central bank said the move aims to meet the rise in demand for these items during Ramadan, facilitate imports, keep prices tolerable and ensure adequate supply.

Banks have also been advised to give priority to opening import LCs for these products to maintain supply in the domestic market.

The circular takes effect immediately and will remain valid until March 15 next year.

The circular refers to two earlier directives. In September 2024, the central bank required a 100 percent cash margin for opening LCs for certain imported goods.

In November 2025, it instructed banks to keep the margin at the minimum level for some essential food imports ahead of Ramadan. That instruction remained valid until March 31 this year.

Source: The Daily Star