BB sets ceiling on bank guarantee charge for ship builders

Local commercial banks will be able to charge a fee of not more than 1.5 per cent annually for issuing any guarantee to local shipbuilders for receiving any advance from a ship importer abroad, officials said Monday. "We've taken the measure to promote the country's growing shipbuilding industry," a senior official of the Bangladesh Bank (BB) told the FE, adding that the shipbuilders would benefit from the latest measure.
The central bank issued a circular in this connection Monday asking the chief executives and managing directors of all commercial banks to follow the directive.
A master circular on schedule of charges, issued by the BB on December 22 last year, will be applicable to opening of letters of credit (LC) in the industry, the circular said.
Both deposits and lending came under the purview of the master circular, that came into effect on January 1, 2010.
The charges for side LCs, deferred LCs, 100 per cent cash margin LCs and back-to-back LCs will be 0.40 per cent, 0.50 per cent, 0.25 per cent and 0.40 per cent on a quarterly basis, according to the circular.
The banks will not charge more than 2.0 per cent as commission annually for opening LCs, the BB said.