Underlining that many garment exporters have been facing difficulties in opening letters of credit (LCs) for sourcing raw materials from the local market, the apparel manufacturers have called upon the central bank of the country (Bangladesh Bank) to either withdraw or relax the condition of having bond licence for opening back-to-back LCs.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) and the Bangladesh Textile Mills Association (BTMA) in a joint letter addressed to the Governor of Bangladesh Bank, Fazle Kabir, requested him to convene a tripartite meeting immediately, involving the stakeholders, the Bangladesh Bank and the National Board of Revenue (NBR).
The President of BTMA Mohammad Ali Khokon, BGMEA President Dr. Rubana Huq and BTTLMEA President Shahadat Hossain have reportedly made the appeal in this direction to the Bangladesh Bank Governor, in the letter sent on 12 November.
The trade bodies further reportedly maintained that there’s no need for an exporter to have bond licence for sourcing raw materials from the domestic market against master export LC and using those raw materials for producing products for exports.
It may be mentioned here that the back-to-back LC is a specialised letter of credit which is opened against the export LC received from the buyer.
This LC consists of two letters of credit – a master LC and a back-to-back LC – to finance a transaction.
