The Bangladesh Bank (BB) has lowered the cash margin for opening letters of credit (LCs) to import cars as the country's foreign exchange inflow and dollar stocks show improvement.

Now, banks will be able to import fully electric and hybrid cars, which generally pollute less than conventional vehicles, by keeping an LC margin based on the bank-client relationship.

However, the commercial lenders will have to maintain a 50 percent cash margin to import other autos like sedans, sport utility vehicles (SUVs), and multi-purpose vehicles (MPVs), according to a central bank circular issued on Thursday.

The new rules will take effect from February 1 of this year.

Read more

Reconditioned car imports, sales decline

In the face of fast-depleting reserves, banks were instructed in July 2022 to maintain a 100 percent cash margin for importing all types of motorcars.

In yesterday's circular, the central bank said that the use of fully electric and hybrid vehicles is being prioritised worldwide, considering their fuel efficiency and environmental friendliness.

Such car models can play a role in reducing carbon emissions and improving the air quality index in densely populated Bangladesh, the BB added.

A senior central bank official told The Daily Star that the central bank relaxed the restriction on motorcar imports as foreign exchange flows are now trending upward and the forex reserves are improving.

Read more

Tax-free import by lawmakers: Customs halts release of 44 luxury cars

He said that the import restriction was imposed on several luxury products when the country's foreign exchange reserves were declining rapidly.

In September 2024, the central bank lifted the LC margin on all types of imports, except for luxury items.