Laboured letter of credit (L/C) processing is one of the remaining bottlenecks in Bangladesh's investment climate according to Japanese delegates at a Japan-Bangladesh trade and business roundtable in Dhaka.

"Bangladesh has the most complicated L/C opening conditions - there are terms and conditions unique only to this country," managing director and chief representative of Japanese lender MUFG Bank, Hideaki Kojima said.

Barrier to investment

Japanese companies are eager to invest in Bangladesh but it is important to remove bottlenecks first to create favourable business climate for Japanese companies, Japan's ambassador to Bangladesh, Ito Naoki, told the roundtable organised by Eastern Bank.

If the bottlenecks are addressed there will be a greater flow of Japanese investment the ambassador said.

Some bottlenecks have been removed over the last six months, but there are still issues that need to be addressed on an urgent basis, he added.

Effective settlements key

Simplifying L/C processing is crucial for business growth, Kojima said, while advising Bangladesh to introduce telegraphic transfer remittance settlement to join global or regional supply chains.

Echoing Kojima's point, country representative of Japan External Trade Organisation (JETRO), Yuji Ando said "effective L/C settlement will greatly improve the investment climate of Bangladesh."

Terms and conditions of L/Cs should also be simplified to stimulate business growth in Bangladesh added Ando, who is also the president of the Japan-Bangladesh Chamber of Commerce & Industry.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.