City Bank has entered into an agreement with IFC to participate in the Global Trade Finance Programme (GTFP) as a confirming bank.
With this, City Bank has become the first bank in Bangladesh to participate in the programme as a confirming bank.
Sheikh Mohammad Maroof, additional managing director of City Bank, and Rosy Khanna, IFC Regional Industry Director, Financial Institutions Group – Asia and Pacific, signed the agreement.
IFC launched the GTFP in 2005 to support the development of trade involving emerging economies. Under this program, IFC offers full or partial guarantees to the confirming banks participating in the GTFP, effectively taking on their payment risks.
City Bank joined the GTFP program in 2012 as an issuing bank, said a statement.
As a confirming bank, City Bank can receive risk coverage from IFC to confirm LCs issued by other banks. This is a big boost to City Bank’s capabilities to facilitate import and export financing of goods and services of the private sector. This is especially significant during the current Covid-19 pandemic period, where City Bank will be able to cater to a higher volume of trade transactions and the higher trade flow will abate the effects of the crisis.
Mr Maroof said the arrangement with IFC is a testament to City Bank’s strength and capabilities. This arrangement will further strengthen City Bank’s ability in facilitating the country’s trade business. Through this agreement, as the first Bangladeshi private commercial bank, City Bank will emerge as an LC confirming bank in the arena of international trade finance, which is a matter of great pride for a Bangladeshi bank.
“Through the GTFP bank network, the City Bank can easily establish working partnerships with a vast number of major international banks and help businesses broaden access to finance while reducing cash collateral requirements,” said Rosy Khanna. “Bangladeshi businesses whose cash flows have been heavily impacted by COVID-19 will also be able to benefit from a continuous flow of trade credit into the market. This will help in increasing trade, creating jobs, and reducing poverty.”
City Bank is one of the oldest and strongest banks in the country with a significant focus on trade. City Bank has tie-ups with major global and regional banks for trade finance facilities.
City Bank also has a strong relationship with Development Finance Institutions such as Asian Development Bank, International Islamic Trade Finance Corporation (member of Islamic Development Bank Group) and DFIs of several countries including the UK, Norway, Netherlands and Austria. Through these relationships, City Bank has gained a strong position to support the trade finance of Bangladesh’s private SME and corporate sector.