LC OPENING

Banks must check licences of petroleum importers

Staff Correspondent | Published: 00:05, Mar 12,2018 | Updated: 23:24, Mar 11,2018

 
 

Bangladesh Bank has instructed all banks to check petroleum importers’ licence criterion and validity before opening letter of credit with a view to containing import of fuel by unauthorised entities.
The central bank issued a circular in this regarding last week following a letter from Bangladesh Energy Regulatory Commission, in which the issue of unauthorised petroleum import was raised to the BB.
Under section 27 and 28 of Bangladesh Energy Regulatory Commission Act 2003, getting the licence from the BERC is mandatory for reserving, marketing, sale and distribution of petroleum, the BERC letter said.
BERC had earlier requested the central bank to issue directives to the scheduled banks to check validity of licences of petroleum importers before opening LCs.
Despite BERC’s letter and BB’s instruction to the banks in this regard, some banks were opening LCs without checking validity of licences and criterion of the importers, thus resulting in non-approval from port authority to release from the ports.
As a result of such LC opening by the scheduled banks, some of the importers come to BERC for getting hurried approval or import licences, creating complexities, the BERC letter said.
To avoid the complexities, BTRC again in January this year requested the central bank to issue directives to the banks so that the banks refrain from opening such LCs.
Following the BERC request, the central bank instructed banks to examine validity of licence of the importers and whether the importer was licensed to import the kind of petroleum the entity was opening LC for.
Besides, the central bank also instructed banks to check the quantity of petroleum the importer is allowed to import under the BERC licence.
The central bank has already sent the directive to principle branches of all the banks that operate foreign transactions. 

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