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The government has issued five counter-guarantees worth Tk 48 billion for Bangladesh Chemical Industries Corporation (BCIC) to facilitate uninterrupted import of fertiliser, officials said.
Contacted, a deputy secretary of Finance Division said, "We issued five counter-guarantees in favour of five state-owned banks (SoBs) in the last week of June."
The finance ministry issued guarantees for one year until June 30, 2019. The tenure of guarantees expired on June 30 this year, according to the BCIC.
Existing counter-guarantees involving Tk 30 billion, Tk 10 billion, Tk 4.0 billion, Tk 2.0 billion and Tk 2.0 billion were issued in favour of Sonali, Janata, Krishi, BASIC and Rupali banks respectively.
Finance Division stipulates that the banks keep the liabilities at fixed level.
BCIC must have enough provision for stockpiling imported fertiliser temporarily. It will have to adjust all letters of credit (LCs) against counter-guarantees by December 2018, said a source.
In August 2017, the finance ministry issued counter-guarantees against the loans provided by Sonali Bank, Janata Bank, Krishi Bank, BASIC Bank and Rupali Bank. But the tenure of loan guarantees expired in June last, according to BCIC.
BCIC recently wrote to the industries ministry to extend the tenure of counter-guarantees, issued in favour of five state-owned banks (SoBs), by one year to June 30, 2019.
The industries ministry forwarded the letter to Finance Division under the finance ministry to continue with fertiliser import smoothly.
The government set a target to import 1.55 million tonnes of urea in fiscal year 2017-18. Of the amount, LCs has already been opened for over 1.34 million tonnes.