Bangladesh Bank (BB) has announced a reduction in the cash margin requirement for opening Letters of Credit (LCs) for car imports, with effect from February 1.
The central bank issued the directive on Thursday under Section 29 of the Bank Companies Act, 1991. It updates the previous requirement, outlined in BPRD Circular Letter 41, which mandated a 100 percent cash margin for LCs related to the import of motor cars, including sedans, SUVs and MPVs, UNB reports.
Under the revised policy, for all other motor vehicles—such as sedans, SUVs and MPVs—a minimum 50 percent cash margin will be required to establish LCs.
But fully electric and hybrid vehicles will now enjoy special consideration.
The cash margin for these eco-friendly vehicles will be determined based on the banker-customer relationship, reflecting a global shift towards energy-efficient and sustainable transportation.
The central bank took the decision to promote environmentally friendly alternatives, reduce carbon emissions and improve the Air Quality Index (AQI) in the densely populated country.
