BB cuts cost of credit for onion import

Posted by BankInfo on Wed, Sep 25 2013 11:38 am

The central bank yesterday asked all banks not to charge more than 12 percent on credit for onion import in an effort to ensure adequate supply and keep the prices of the cooking item stable.

Banks, in some cases, were charging more than 14 percent for such imports, Bangladesh Bank officials said.
The BB in a notice also advised the banks to keep the loan-margin ratio at the minimum level based on the banker-client relationship.

The central bank directive will remain effective till December 31.

The local market was destabilised of late due to a surge in prices in the international markets, the BB said.
The central bank move came a day after the commerce minister’s request for reducing the credit interest and LC margin for onion imports.

The prices of imported onion in Bangladesh soared 270 percent year-on-year to Tk 90 a kg yesterday after bad weather in India — the country’s main source of the vegetable — created a supply crunch. India hiked its export price to $900 a tonne on Saturday, from $250 a month ago.

The Trading Corporation of Bangladesh on Sunday started selling onion at Tk 55 a kilogram in open markets across the country to cool the prices.

However, consumers cannot buy more than a kg at one time from the state-owned TCB, which is selling the vegetable item through its dealers via trucks.

News:The Daily Star/25-Sep-2013