The cabinet of the Maldives has discussed difficulties facing businesses attempting to obtain letters of credit (L/Cs) from local banks.

The banks may be given more time to implement new regulations.

Complexities

Banks in the Maldives are apparently finding it difficult to issue L/Cs because of the complexity of new regulations.

This is causing concern in the cabinet, which has discussed how a lack of L/Cs could have negative impacts on trade and force commodity prices up.

More time

Minister of Finance and Treasury, Ali Hashim, says his ministry has already met with banks and the Maldives Monetary Authority (MMA) to discuss the issue.

Hashim told local media that the MMA was trying to address the issue by allowing banks a grace period for implementing the new regulations.

Interventions

Last year the cabinet of the Maldives stepped in to provide an L/C facility for importers of basic food items and commodities faced with dollar shortages.

That arrangement was made under a US$50 million trade credit facility provided to the Maldives by the Indian government.

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