Dhaka (Mizzima) - Experts from Burma and Bangladesh initiated discussions in Dhaka on Monday on expansion of bilateral trade by establishing direct banking facilities between the two countries, officials said.
A four-member team, headed by Maung Maung, Director of Accounts Department of the Central Bank of Myanmar, met five selected local commercial banks' official on the day to discuss establishing direct banking relations between the two countries.
Senior officials of the Myanmar Investment and Commerce Bank, Myanmar Foreign Trade Bank and Myanmar Economic Bank have been included in the technical team.
The meeting also discussed strengthening bilateral banking transactions under the existing Asian Clearing Union (ACU) mechanism, the officials and bankers said.
The ACU is an arrangement between Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to facilitate intra-regional transactions among the participating central banks on a multilateral basis.
The ACU started its operations in November 1975 to help boost trade relations among its member countries. Bangladesh and Burma joined the union as the sixth and seventh members in 1976 and 1977 respectively. Bhutan joined the ACU on December 9, 1999.
Senior Executive Director of the Bangladesh Bank (BB), the country’s central bank, Khandakar Muzharul Haque inaugurated the meeting held at the conference room of the central bank in the capital, Dhaka on Monday morning while other BB officials were present.
The final round of talks will be held on today (Tuesday) with BB officials.
“The discussions seem to be progressing. We expect that establishing a direct letter of credit (LC) relationship between the two countries would be possible,” Deputy Managing Director of the National Credit and Commerce (NCC) Bank Limited, a leading private commercial bank, SM Shamsul Alam, who attended the meeting, told Mizzima in Dhaka after the meeting.
Earlier, the central bank of Bangladesh selected five commercial banks, including a foreign bank, to meet the technical team on the day to find out ways to strengthen bilateral banking transactions between the two countries, BB officials added.
The five selected banks, which represent all 48 scheduled banks in Bangladesh, are Sonali Bank Limited, Janata Bank Limited, AB Bank Limited, NCC Bank Limited and Standard Chartered Bank.
The Burmese team arrived in Dhaka on Sunday on a two-day official visit after the tour of a Bangladesh technical team to the Southeast Asian country nearly eight months ago.
A four-member team, headed by BB Deputy Governor Ziaul Hasan Siddiqui, visited Burma in February this year to discuss simplification of the payment procedure through strengthening banking arrangements between the two countries.
Currently, payments for foreign trade are settled between the two countries through a third country like Singapore and Thailand.
The country’s importers are now settling their payments for bulk exports through bank drafts issued by foreign banks in a third country. An importer is entitled to get bank draft against import worth US$ 10,000-$20,000 at a time under the existing border trade arrangement.
"We face problems when we import large quantities and a number of drafts have to be issued, which take time for settlement through a third country,” a importer told Mizzima, adding that banking transactions should be strengthened immediately to gear up bilateral trade between the two countries.
Exporters in Burma do not prefer to export their products through opening of LCs due to imposition of investment and trade sanctions on the Southeast Asian country by the United States, the European Union and Canada.
The volume of bilateral trade between the two countries has been quite ‘insignificant’ for years because of lack of proper initiatives. The balance of trade, according to officials, has remained in favour of Burma over the past 13 years.
However, a review of bilateral trade between the two countries shows that the trade balance was in favour of Bangladesh from 1991-92 to 1995-96. But in 1996-97 it tilted in favour of Burma.
Dhaka exported goods and commodities worth only US$9.17 million to Rangoon in 2008-09 while its imports during the period stood at $66.49 million, the data showed.
Bangladesh mainly exports pharmaceutical products, leather, woven garments and other manufacturing goods to Burma and imports wooden articles, vegetable products, processed food and fish.
