The government has issued three state guarantees totalling Tk 5.80 billion in favour of Sonali Bank to facilitate the procurement of essential commodities by the Trading Corporation of Bangladesh (TCB), sources said.

The state-run TCB under the Ministry of Commerce (MoC) is set to procure significant volumes of essential items to help keep the local market stable

The products include 5,000 tonnes of lentils (local tender), 22 million liters of palm olein (through local tender), and 25,000 tonnes of sugar (through international tender), official sources said.

The TCB has initiated the move as part of the government's ongoing efforts to maintain a steady supply of essential items and control market prices through the state-run trading arm.

The state guarantees have been issued to the Foreign Branch of Sonali Bank located at Motijheel, said the official source.

To ensure financial discipline and transparency, the Finance Division under the Ministry of Finance has set several strict conditions on the facility, it was learnt.

The counter-guarantees will remain valid for one year from the date of issuance, according to the official sources.

The agency will have to inform the Finance Division immediately after the payment of each installment of the proposed LTR (Loan against Trust Receipt), including any previous outstanding dues, it was learnt. Updated information with regard to any outstanding balances must be reported to the Finance Division by the 7th of every month until the loan is fully repaid.

Procurement must strictly adhere to existing national purchase laws and regulations, as official sources said, adding that the total transparency and accountability must be ensured to secure competitive prices.

As per the condition, the fund has to be used primarily to settle outstanding debts if TCB receives any subsidies from the government. Such key essential items would be sold among the targeted 10 million smart card holder families under the TCB.

The government has been operating sales drives of key essentials at subsidised prices across the country every month.