The Bangladesh Bank (BB) has granted permission to Shinepukur Ceramics, a company within the Beximco Group, to initiate letters of credit (LCs) for importing raw materials under a special arrangement. This decision, communicated through a recent notification, aims to sustain operations at the ceramics manufacturer and safeguard its employees.
As per the arrangement, Shinepukur Ceramics can now create import LCs with Sonali Bank PLC by providing a 100 percent margin, requiring the full payment of the import value in advance. This arrangement will be effective until December of the following year.
In compliance with Section 27 Ka Ka (3) of the Banking Companies Act, financial institutions are prohibited from offering loan facilities to defaulting borrowers. However, the recent circular from the BB grants Shinepukur Ceramics an exemption from this regulation for a period of 18 months.
Under the conditions set by the central bank, all earnings of the company must be deposited into a specific bank account. Sonali Bank will then collect its outstanding dues from this account on a proportional basis. Notably, the government and the central bank will not bear any liability for the loan facilities supporting the opening of import LCs, as outlined in the notification.
Consequently, Sonali Bank is restricted from seeking financial aid from the government or the BB for these loans in the future, as stated by the central bank. Recently, the BB also provided a similar arrangement to Abdul Monem Sugar Refinery Ltd, permitting the company to continue its import LC operations despite being a defaulting borrower.
