Bangladesh: A.S & Associates discuss the country's new import laws
The Central Bank of Bangladesh has tightened the country’s imports as the importers will have to maintain up to 100% margin against import of luxurious and nonessential items, including Sedan car, sport utility vehicle and multi-purpose vehicle. The central bank has also brought several other items under its high import letter of credit margin net.
Under the new regulation, gold and gold-ornaments, precious metal, pearl, readymade garments, leather goods, jute goods, cosmetics, furniture and decoration items, fruits and flowers, non-cereal food, processed food and drinks, alcoholic drinks and tobacco or alternatives of these items and other luxurious products imports will be subject to 100% cash LC margin. Previously, the obligation was on cars and electric and electronics home appliances only.
There would be no mandatory LC margin limit on imports of baby food, essential food items, fuel, health directorate-approved live saving drugs and other kits, raw materials and capital machinery directly imported for the production-oriented local industries and export-oriented industries, agricultural equipment and essential products of the government’s priority projects. Banks would determine the applicable LC margin for the products based on its relationship with their customers. Apart from the luxurious and essential items, the central bank asked banks to set LC margin at maximum 75% in cash for imports of non-essential items. The central bank has also asked banks to consider only the importers’ own fund as LC margin and not to treat any fund issued as loans as margin or not to create any fresh loans to fulfil the LC margin obligation.
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