Bangladesh Bank has removed the 100 percent margin requirement for opening letters of credit (LCs) for six struggling banks, easing restrictions imposed earlier in August.
The decision comes after a meeting between the central bank and the managing directors of Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank.
The banks will now follow the standard rules for opening LCs, as directed by a letter from the central bank. This policy reversal is expected to alleviate operational challenges faced by these banks in managing their import activities.
The restrictions were initially introduced to address liquidity and governance issues within the institutions. However, following the fall of the Awami League government on August 5, the boards of these banks were restructured.
The boards were previously dominated by the controversial S Alam Group, a business conglomerate linked to allegations of mismanagement and irregularities.
