Deferred payment halt hikes rice price

The government has decided to reduce taxes on imported rice to curtail rice price but the reality shows that rice price is actually not going down. Recently Bangladesh Bank issued a circular to all banks to allow traders to import rice at 0% (zero) margin on letter of credit (LC).

Earlier importers had to deposit 30% of the LC money to banks but now no monetary deposit is required for importing rice. Previously businessmen used to import rice through deferred payment. But Commerce Ministry has halted the system of deferred payment through a recent circular, BB officials said.

As a result of this circular it has been difficult for traders to import rice from abroad. On the other hand, a particular group of businessmen have set up a syndicate by importing rice taking advantage of 0% LC margin.

Sources from Bangladesh Bank have informed stoppage of deferred payment has created serious difficulties for import of rice. For this reason rice price cannot be reduced and rice crisis cannot be abated. Secretary for Commerce Ministry Suvash Bose said to The Asian Age deferred payment is handled by National Board of Reve-nue (NBR).

In case of letters of credit, importers have to pay bills right after selling rice. On the other hand, deferred payment allows businessmen to pay bills within a period of 120 to 180 days. As deferred payment has been stopped, rice importers are not being able to avail  this advantage.