Dhaka Chamber of Commerce and Industry (DCCI) has welcomed Bangladesh Bank's recent decision to remove the Letter of Credit (LC) margin on all types of imports except for some luxury products manufactured in Bangladesh. The move aims to ease the stagnation in product imports and accelerate industrialization, according to a circular issued by the central bank.

The DCCI expressed optimism that this policy change will provide significant relief to importers, allowing them to bring in capital equipment, consumer goods, and raw materials without any margin requirements based on bank-customer relationships. The chamber anticipates that the increased imports will lead to higher levels of new investment, reinvestment, and overall industrial production, which could subsequently boost export growth.

"The supply of raw materials to industries will increase, enabling factories to operate at full capacity," said DCCI President Ashraf Ahmed. "This will enhance the availability of products in the market, which may positively impact the overall inflation situation in the country."

In addition to lifting the LC margin, the DCCI praised Bangladesh Bank’s initiative to establish a ‘Revolving Refinancing Fund’ aimed at expanding financial services for the development of cottage, micro, small, and medium enterprises (CMSMEs) in the country. The chamber believes this fund will simplify financing for entrepreneurs in the sector, addressing the ongoing liquidity crisis and easing the challenges faced by CMSMEs in obtaining loans.

"The Revolving Refinancing Fund is expected to play a pivotal role in providing refinancing benefits to small entrepreneurs," Ahmed stated. "This initiative will support the growth of production, income, and employment in the CMSME sector, which is the main driving force of the country’s economy."

The fund is designed to assist affected small entrepreneurs in securing the working capital needed to recover and grow. Notably, the interest rate for refinancing under this fund will not exceed 8%, and there will be no supervision charges or early settlement fees, providing much-needed relief to the CMSME sector.

DCCI emphasized the importance of special advantages for the CMSME sector in fostering the development of backward linkage industries and generating employment, noting that positive impacts from these measures will likely be reflected across the overall economy.

The chamber's endorsement of these initiatives underscores the critical role of the central bank's decisions in supporting the financial stability and economic growth of Bangladesh, particularly during challenging times for the nation’s financial sector.