BB cuts bank service charges

Bangladesh Bank has once again lowered different banking charges, fees and commissions to provide assistance to businessmen hurt by falling exports.

The central bank yesterday sent a letter to all commercial banks on the new decision.

The highest rate of tri-monthly commission for opening deferred L/Cs may be fixed at 0.50 percent of the total amount, down from 0.60 percent now.

The L/C confirmation charge has been fixed at a maximum of 0.20 percent from the existing 0.25 percent. L/C advising, amendment and transfer charges have been reset at a maximum of Tk 750 from the current charge of Tk 1,000.

Charges for data fax, handling, copy document endorsement have been cancelled, the central bank said in the circular.

Commissions on export bill negotiation and export bill collection may be set at a maximum of 0.15 percent. Earlier, the banks had fixed these charges independently.

When the banks give loans to any customer in foreign currency from the export development fund, the rate of interest will be fixed in line with LIBOR (London Inter-bank Offer Rate) plus 1 percent.

Exporters will not have to pay overdue interests in case of site payments for irrevocable L/C. Site payment means importers will pay the bank on receipt of export documents.

In the backdrop of falling exports, the government is going to provide different types of incentive to the exporters, said a Bangladesh Bank official. The government has already prepared a package.

The finance minister is likely to announce the package after returning from Turkey and the UAE. These steps have been taken in the banking sector as part of the measure.

Investment is also experiencing a sluggish trend. The cut in service charges is part of a measure to boost investment.

Earlier in September last year, the central bank cut service charges, commissions and fees. Earlier this year, the BB has asked Bangladesh Association of Banks and Association of Bankers Bangladesh to review the charges, fees and commissions.

The Federation of Bangladesh Chambers of Commerce and Industry sent a proposal to the BB four months ago to cut banks' charges, fees and commissions.

Welcoming the BB decision, Helal Ahmed Chowdhury, managing director of Pubali Bank, said cutting charges and commissions is a continuous process.

“We have reduced it at least twice in the past one a half year,” Chowdhury said.