City Bank has entered into an agreement with IFC to participate in the Global Trade Finance Program (GTFP) which made it the first bank in Bangladesh to participate in the program as a confirming bank.
City Bank Additional Managing Director Sheikh Mohammad Maroof and IFC Regional Industry Director (Financial Institutions Group – Asia and Pacific) Rosy Khanna signed this milestone agreement on behalf of respective organisations, said a press release.
Sheikh Mohammad Maroof expressed his delight adding that the arrangement with IFC is a testament to City Bank's strength and capabilities.
"This arrangement will further strengthen City Bank's ability in facilitating country's trade business. Through this agreement, as the first Bangladeshi private commercial bank, City Bank will emerge as an LC confirming bank in the arena of international trade finance, which is a matter of great pride for Bangladeshi banks," he said.
"Through the GTFP bank network, the City Bank can easily establish working partnerships with a vast number of major international banks and help businesses broaden access to finance while reducing cash collateral requirements," said Rosy Khanna.
"Bangladeshi businesses whose cash flows have been heavily impacted by COVID-19 will also be able to benefit from a continuous flow of trade credit into the market. This will help in increasing trade, creating jobs, and reducing poverty," she added.
IFC launched the GTFP in 2005 to support the development of trade involving emerging economies.
Under this program, IFC offers full or partial guarantees to the confirming banks participating in the GTFP, effectively taking on their payment risks.
City Bank joined the GTFP program in 2012 as an issuing bank. As a confirming bank under the program, City Bank can receive risk coverage from IFC to confirm LCs issued by other banks.