Dhaka, July 7 -- Bangladesh Bank has suspended a section of the Bank Company Act for a year only to allow letter of credit (LC) opening in favour of a defaulter company. The BB move has taken many by surprise.

Issuing a circular Monday, the central bank instructed the commercial banks to maintain 100-percent cash margin for opening LCs, purportedly for Abdul Monem Sugar Refinery Ltd (AMSRL).

Alongside the circular, the banking regulator also issued a notification, signed by BB Deputy Governor Dr Md. Kabir Ahmed, stating that "in exercise of the powers conferred by Section 121 of the Bank Company Act 1991, it is hereby notified for the information of all concerned that the provisions of Section 27Ka (3) of the Bank Company Act 1991 shall...