City Bank has entered into an agreement with IFC to participate in the Global Trade Finance Program (GTFP) as a confirming bank.
With this, City Bank has become the first bank in Bangladesh to participate in the program, said a press release.
Sheikh Mohammad Maroof, additional managing director of City Bank, and Rosy Khanna, IFC regional industry director, Financial Institutions Group – Asia and Pacific, signed the agreement, the release added.
IFC launched the GTFP in 2005 to support the development of trade involving emerging economies.
Under this program, IFC offers full or partial guarantees to the confirming banks participating in the GTFP, effectively taking on their payment risks.
City Bank joined the GTFP program in 2012 as an issuing bank.
As a confirming bank under the program, City Bank can receive risk coverage from IFC to confirm LCs issued by other banks.
This is a big boost to City Bank’s capabilities to facilitate import and export financing of goods and services of private sector.
This is especially significant during the current Covid-19 pandemic period, where City Bank will be able to cater to a higher volume of trade transactions and the higher trade flow will abate the effects of the crisis.
This arrangement will further strengthen City Bank’s ability in facilitating country’s trade business. Through this agreement, as a first Bangladeshi private commercial bank, City Bank will emerge as a LC confirming bank in the arena of international trade finance, which is a matter of great pride for Bangladeshi bank, said City Bank's Sheikh Mohammad Maroof.
Through the GTFP bank network, the City Bank can easily establish working partnerships with a vast number of major international banks and help businesses broaden access to finance, while reducing cash collateral requirements, said IFC's Rosy Khanna.
Bangladeshi businesses whose cash flows have been heavily impacted by Covid-19 will be also be able to benefit from a continuous flow of trade credit into the market, she added.
City Bank also has strong relationship with Development Finance Institutions such as Asian Development Bank, International Islamic Trade Finance Corporation (member of Islamic Development Bank group) and DFIs of several countries including UK, Norway, Netherlands and Austria.
