Bangladesh Bank orders minimum cash margin on LCs to keep Ramadan supplies steady

Bangladesh Bank has issued a directive to keep the cash margin rate at the minimum level for the import of ten major essential consumer goods ahead of the holy month of Ramadan.

On Sunday (November 8), the directive was sent from the central bank's Banking Regulation and Policy Department to the managing directors and chief executives of all scheduled banks in the country.

The central bank said commercial banks will set the margin rate for opening letters of credit (LCs) on the basis of their customer relationships. It also urged that the highest priority be given to LC opening so that the uninterrupted supply of essential goods in the domestic market is ensured.

The directive said demand for rice, wheat or flour, onion, lentil, soybean and palm oil and other edible oils, sugar, chickpea, peas, spices and dates rises manifold during Ramadan.

The concession has been given to ease the import process, keep the supply of these goods normal, and keep prices within the purchasing power of general consumers.

As a result, instead of locking up large amounts of cash from traders, banks must provide the facility to open LCs at a minimum margin on the basis of mutual relationships, which will help ease traders' initial financial pressure.

Recalling the earlier policy, the circular said BRPD Circular Letter No. 41, issued on September 5, 2024, had imposed a strict requirement of 100 percent cash margin on certain goods.

Later, considering Ramadan demand, BRPD Circular Letter No. 24, issued on November 11, 2025, decided to bring the margin rate down on the basis of banker-customer relationships. Its validity ended on March 31, 2026.

With the coming Ramadan in view, the same financial facility has been created again for importers.

When the margin burden falls at the time of opening import LCs, importers' own working capital requirement comes down significantly.

Bangladesh Bank issued the order under the powers given in Section 45 of the Bank Company Act, 1991. The central bank confirmed that the directive will take effect immediately and remain in force in all banks in the country until March 15, 2027.