According to officials, Bangladesh Bank (BB) has decided in principle to remove restrictions on opening of letters of credit (LC) by six crisis-hit banks.

The measure, which was imposed in August this year, prevented banks from opening LC only by maintaining a 100 percent margin.

The development followed a meeting yesterday at the Bangladesh Bank headquarters between officials of the troubled banks and central bank officials.

Bangladesh Bank Governor Ahsan H. Mansur chaired the meeting, while Nurun Nahar, Md. Habibur Rahman and Md. Kabir Ahmed, deputy governors of the central bank, were also present.

The six banks also asked the central bank to quickly process liquidity support, which is offered through the interbank money market.

On the other hand, CEOs and Chairman of Bangladesh Commerce Bank, Padma Bank, Union Bank, Social Islami Bank, First Security Islami Bank and ICB Islami Bank were present.

Contacted, Mohammad Forkanullah, CEO (acting) of Social Islami Bank, told The Daily Star that the governor responded positively to his request.

Forkanullah said the central bank invited them to learn about the latest developments including loan recovery, deposit mobilization and general banking activities.

After the political change on August 5, all six lenders, except Padma Bank, saw their boards reconstituted.

Seeking anonymity, a senior central bank official also confirmed to The Daily Star that the governor had agreed to relax restrictions.

The six banks also asked the central bank to quickly process liquidity support, which is offered through the interbank money market.

They also urged the central bank to intervene and reduce the profit rates they were charged for availing liquidity support.

The president of one of the banks affected by the crisis, on condition of anonymity, told this newspaper that the ongoing process to provide them with liquidity support is not “well designed.”

“We need rapid and cumulative liquidity support rather than step by step to deal with the current deposit withdrawal pressure.”

The official added that the banks that provide support take advantage of their situation by imposing high profit rates.

In response, central bank officials said the rate was determined by the market and the regulator would not intervene in this regard.