Bangladesh Bank withdraws TT discounting facility

Bangladesh Bank has withdrawn the Telegraphic Transfer (TT) discounting facility for scheduled banks, saying it is no longer necessary due to the availability of alternative short-term liquidity tools.

In a circular issued on Monday, the central bank said banks can now effectively manage daily liquidity through the call money market, repo, Standing Lending Facility (SLF) and interbank borrowing. As a result, the TT discounting facility�"under which banks obtained short-term funds by placing a lien on their current accounts with Bangladesh Bank�"has been discontinued with effect from July 1.

The central bank also noted that use of the facility had declined significantly in recent years. The directive, issued under Section 45 of the Banking Companies Act, 1991, has been circulated to the managing directors and chief executive officers of all scheduled banks for implementation.