LC overdue payments will be cleared in 5-6 months: BB

The central bank shares details after online meeting with 122 bank MDs and CEOs

Bangladesh Bank has decided that overdue payments for letters of credit, or LC, will be settled within the next five to six months.

On Tuesday, the central bank held an online meeting with managing directors and chief executive officers, or CEO, from nearly 122 domestic and international banks.

Husne Ara Shikha, spokesperson for the central bank, communicated this stance to journalists following the meeting.

Bangladesh Bank officials said the meeting was organised to explain Bangladesh's overall economic situation and reassure foreign banks.

Shikha said, "The banks said state-owned banks have overdue payments and the government owes them as well. They asked how the central bank and government will settle these."

“The governor has informed that $800 million in dues has already been paid. Bangladesh Bank is currently procuring dollars from the interbank market to provide to state-owned banks, which are prioritising import payments for sectors such as energy, fertilisers, and petroleum,” she added.

Earlier, Governor Ahsan H Mansur said no dollars have been sold from reserves to commercial banks since he assumed office.

Instead, dollars are being supplied from the interbank market for government LC openings.

“The governor has also expressed optimism that all overdue payments will be settled. He added that the relationship between banks and clients is very close and not limited to just one or two months,” said Sikha.

She added, “It is true that the Bangladesh government or Bangladesh Bank is currently in a difficult situation. But we have no record of default in the past, and even now, we believe we can clear our overdue payments if they [foreign banks] continue normal business relations with us."