BCIC to get Tk 48b counter-guarantee

The government is set to extend counter-guarantees worth Tk 48 billion for the Bangladesh Chemical Industries Corporation (BCIC), officials said.

The measure will facilitate uninterrupted imports of fertiliser for the country's agriculture sector.

The BCIC recently wrote to industries ministry seeking extension of the tenure of counter-guarantees, issued in favour of five state-owned banks (SoBs), by one year to June 30, 2020.

The tenure of counter-guarantees expired on June 30 this year, according to the BCIC.

Industries ministry later forwarded the letter to finance ministry to continue fertiliser imports smoothly.

Contacted, a deputy secretary of finance division said, "We're working on the issue."

"The government usually provides counter-guarantees every year," he added.

A senior BCIC official said it is not possible for banks to open letters of credit (LCs) to import urea for fiscal year (FY) 2018-19.

Fertiliser imports would get hampered if the government does not issue counter-guarantees to the SoBs, he told the FE.

In June 2018, finance division issued counter-guarantees against the loans provided by Sonali Bank, Janata Bank, Krishi Bank, BASIC Bank and Rupali Bank.

Existing counter-guarantees of Tk 30 billion, Tk 10 billion, Tk 4.0 billion, Tk 2.0 billion and Tk 2.0 billion were issued for Sonali, Janata, Krishi, BASIC and Rupali banks respectively.

Finance division stipulates that the banks keep the liabilities at a fixed level.

The BCIC must have enough provision for stockpiling imported fertiliser temporarily, said a source.

The government set a target to import 2.0 million tonnes of urea in FY '19. Of the amount, LCs have already been opened for over 1.83 million tonnes.

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