Industry

IBBL sets up credit guarantee arrangement with USDA

Islami Bank Bangladesh Limited (IBBL) has set up a credit guarantee arrangement with the US Department of Agriculture (USDA).

Under the Export Credit Guarantee Program (GSM-102), the USDA provides credit guarantees to the US-approved banks for 18 months.

The USDA’s Foreign Agricultural Service (FAS) operates the programme on behalf of the Commodity Credit Corporation (CCC).

The USDA has approved a limit of $30 million for IBBL. The importers, using the service of IBBL, will get the guarantee facilities for a maximum of 18 months from the USDA enlisted banks at a lower interest rate.

The exporters’ banks will extend their financing facilities with no requirement for adding confirmation to the irrevocable letter of credit (LC).

IBBL will issue a dollar-denominated, irrevocable LC in favour of the US exporters.

The US exporters may get payment from banks of the US after submitting export documents under the guarantee scheme.

They will have to provide export reports to the CCC for each shipment as per the payment guarantee scheme.

Source: United News of Bangladesh