Bangladesh Bank on Thursday has instructed banks to open letter of credit (LC) to import onion with a minimum margin from the importers.
It will help to reduce importers' initial investment of opening LC, a senior official of the central bank explained to The Business Standard.
The official said, "Generally importers have to deposit 10% of a product value as a margin while opening a LC. But for importing onion we instructed banks to take a minimum margin.
He said, "Minimum margin can be 1 percent. So, importers can invest the rest of the money in other sectors."
Recently the onion price is rising in the world market and henceforth, the local market price is also rising. Last year people have faced a huge price hike of onion. So, they are rushing to the kitchen market to buy extra onion now. The demand for onion is rising quickly.
"But the country is already lacking 8 lakh tonnes of onion against demand," the official said. "So, we quickly instructed banks to open LC easily. It will take 10 days to bring onion with this easiest LC process," he further added.
The Bangladesh Bank's instruction is already in effect and the facilities will continue till 31 December this year, read the circular.