Central bank must be informed before opening import LCs

The Bangladesh Bank has instructed banks to report to the money market regulator prior to opening a letter of credit (LC) for imports worth $5 million or above amid the ongoing dollar crisis.

"As a part of import monitoring, banks are advised to submit import information to the Bangladesh Bank Online Import Monitoring System 24 hours prior to opening LCs based on proforma invoices/purchase contracts," the central bank said in a circular on Thursday.

"The reporting requirement for the said transactions will be for import value of $5 million and above or its equivalent, excluding imports by the government," it added.

Banks shall finalise the report on completion of opening of the relative LCs, read the circular.

A senior official at the Bangladesh Bank said that the new instruction has been issued to increase the monitoring of what kind of products are being imported to reduce the liquidity crisis of foreign currency.

Banks are required to report all types of foreign exchange transactions carried out by them, including those of offshore banking operations to the different web portals of the Bangladesh Bank on a regular basis, the circular said.