Bangladesh Bank (BB) issued a circular on Wednesday regarding the withdrawal of Letter of Commitment for Bank's Undertaking for Line of Credit. According to the circular, some banks revoke Letter of Commitment for Bank's Undertaking while evaluating submitted tenders. As a result sometimes tender submitter who quotes a higher price is assigned with the concerned project instead of the tender submitter who quoted a lower price. It leads to the obstruction of public works and it also causes monetary losses to the government. The central bank's circular states that from now on the letter of commitment for bank's undertaking issued by banks cannot be nullified without consent from the procuring entity. Bangladesh Bank asserts that this order has been issued to speed up public works, to reduce unnecessary expenditures and to bring about transparency and integrity in the tender selection process. Bangladesh Bank issued this order by the power of Bank Company Act, 1991, Section 45. The circular was signed by Bangladesh Bank's General Manager Maksuda Begum.
Bangladesh Bank's spokesman Sirajul Islam said to The Asian Age, "This order has been issued to expedite public works and to establish transparency and integrity in selecting the right tender. It will be beneficial both for the government and the tender submitters."
Dr. Nazneen Ahmed, Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS) said that some public works become too lengthy due to bureaucratic complications and for other reasons. She further said that it would be certainly helpful for eradicating disorder and irregularities in tender assessment if the order is properly executed.