SBL is the first private sector bank in Bangladesh to sign the facilities agreement with ADB under trade finance facilitation programme (TFFP).

ADB Country Director for Bangladesh Toru Shibuichi and SBL Deputy Managing Director Syed Imtiaz Hasib signed the agreement for the respective sides.

The agreement is part of ADB's new TFFP to use financial intermediation to facilitate private sector development and economic growth in the region.

The ADB release said that the program has been designed to develop and enhance the capability of local banks to provide trade finance products to provide sector importers and exporters to facilitate international trade.

The programme will support local issuing banks through two facilities: -- a partial credit guarantee under which ADB will guarantee to confirming banks the payment of letters of credit and other documentary credits issued by accredited local banks in the Asian Region; and -- a revolving credit under which ADB will offer short-term loans to accredited local banks to help fund the hard currency borrowing requirements of their private sector exporter and importer clients.

These facilities will offer importers and exporters access to reliable and reasonable terms and conditions for trade finance, as well as provide liquidity and stability to the trade finance system.

The programme will also make it easier for local banks to deal with their international counterparts; lower the need for the local banks to provide cash collateral; reduce the risk for imports and exports by encouraging the use of trade finance instruments; provide more cost-effective trade finance mechanisms.

Bangladesh is among the first countries, along with Sri Lanka and Vietnam, where the TFFP is being implemented. Once the TFFP is fully implemented, more than 35 local banks in 16 countries are expected to participate, the ADB release added.