Visa Worldwide Pte. Ltd. (Visa) partners with Eastern Bank Ltd. (EBL) to roll out a unique solution by offering Trustee Services to its clients in Bangladesh to address the domestic settlement issues by maintaining cash collateral with the Trust. A virtual signing ceremony was held through webinar between EBL and Visa. 

This innovative trustee service towards domestic settlement obligations will provide Visa clients with the option to ensure security in the form of cash collateral in local currency (BDT) against domestic transactions. Previously such collateral (both for domestic and cross-border settlement obligations) were provided by USD denominated standby letters of credit (SBLC) issued by international banks favoring Visa.

The benefits associated with this structure entails cost savings and simplified process for Visa clients. This cash collateral arrangement will reduce outward foreign currency remittance and as a result increase foreign currency reserve.

Currently, Visa has 29 member banks in Bangladesh and the total collateral amount is approximately 25 million dollars.

To celebrate this alliance, Deputy Governor of Bangladesh Bank, Ahmed Jamal was present as the chief guest of the signing ceremony. Soumya Basu, Visa’s Country Manager for Bangladesh, Nepal & Bhutan along with representatives from EBL namely Ali Reza Iftekhar, Managing Director & CEO, Ahmed Shaheen, DMD & Head of Corporate Banking, M. Khorshed Anowar, DMD & Head of Retail & SME Banking, and Riad Mahmud Chowdhury, DMD & Head of Corporate Business were also present.

Deputy Governor Ahmed Jamal appreciated the initiative and said this innovative structure would reduce the outflow of foreign exchange from the country. He believes that majority stakeholders will be interested to enroll this alternative and innovative arrangement instead of providing the USD denominated standby letters of credit considering domestic settlement issue.

The Managing Director & CEO of EBL Ali Reza Iftekhar said this deal was a new chapter in EBL- Visa relationship and historic one for the local banking industry. EBL has always been a pioneer in product and service innovation. This alternative solution to USD denominated standby letters of credit is not only a cost effective option for Visa member banks in Bangladesh but has also many additional benefits for its stakeholders.

DMD and Head of Retail and SME Banking M. Khorshed Anowar said that with the introduction of this service, collateral execution structure of Visa principal member banks in Bangladesh will get a new dimension.

Soumya Basu, Visa’s Country Manager for Bangladesh, Nepal & Bhutan thanked EBL for partnering with Visa in rolling out this unique collateral arrangement and urged VISA’s member banks in Bangladesh to take advantage of this seamless and cost efficient business arrangement in the market.