HSBC in Bangladesh has declined to issue advice on two foreign L/Cs (letters of credit) issued by the state-run Sonali Bank Limited (SBL), according to local media.

The Financial Express (FE) says it does not know the reason for the refusal, but its sources suggest it may be related to SBL's failure to settle payments to HSBC.

Overdue payments

The newspaper says it has been told by an HSBC official that SBL has not settled some inland bills.

Meanwhile, the FE says that an SBL official has told the newspaper that some of the overdue payments are related to local L/Cs.

Foreign relations

The report says that an SBL official indicated that HSBC had refused to issue advice in favour of two foreign L/Cs worth about US$200,000.

The SBL official also reportedly said that the value of L/Cs was less important to the state-run bank than good relationships with foreign banking partners.

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