BB eases payment rules to improve onion import
The central bank yesterday allowed onion importers to open letters of credit utilizing the 90-day deferred payment tool within efforts to help them import the kitchen staple easily.
The deferred payment will be applicable under the buyer's and supplier's credit, according to a central bank notice.
Deferred payment is financing arrangement where the borrower is allowed to get started on making payments at some specified amount of time in the future. It is normally found in retail settings in which a person buys and receives an item with a committed action to start making payments at another date.
The buyer's credit is a short-term loan facility extended to an importer by an overseas lender such as a bank or lender to finance the purchase of capital goods, services, and other big-ticket items.
The importer, to whom the loan is issued, is the buyer of goods, as the exporter is the seller.
The supplier's credit is a trade credit supplied by the supplier itself. This is a sale on credit basis. Import on deferred or usance basis is the example of a supplier's credit.
The credit should be secured by a payment guarantee from the buyer's bank.
The deferred payment for onion importers will succeed until December this season.
On September 17, the central bank instructed banks to keep carefully the margin on the opening of LCs for onions at the very least level.
Bangladesh Bank said the cost of onion is on an upward trend at local markets following the price hike of the main element cooking ingredient in international markets.
Prices shot up between Tk 100 and Tk 120 per kg last week after India announced halting onion export to Bangladesh. Only a week earlier it had been Tk 40 and Tk 50 per kg.
Yesterday, the neighborhood variety was selling at Tk 80 to Tk 90, up 47.83 per cent from yesterday. Imported onions sold for Tk 55 to Tk 70, up 31.58 per cent from the other day, data from the state-run Trading Corporation of Bangladesh showed.
