BB asks banks to levy minimum LC margin on rice, wheat imports

In order to maintain reasonable prices for these commodities on the local market and ensure a consistent supply, Bangladesh Bank (BB) has advised banks to require a small cash advance from importers when generating letters of credit (LCs) for imports of rice and wheat.

The advance payment, also known as the cash LC margin, should be maintained at the lowest level possible based on the bank-client relationship, according to a BB circular published on Wednesday.

Due to the interruption to the global supply chain caused by the negative effects of the Russia-Ukraine war, food crop prices are trending upward. As a result, the cost of transporting goods throughout the world has increased, which has an impact on local market prices.

Therefore, it is critical to maintain acceptable rice and wheat prices and to guarantee a consistent supply, as stated in the circular.