Bangladesh Bank further eases import payment

Offshore banks, external financiers allowed to pay under buyer’s credit

January 15, 2021 08:59:56

The Bangladesh Bank seal is pictured on the wall outside the central bank headquarters in Motijheel, the bustling commercial hub in capital Dhaka — UNB/Files

The central bank has extended the upfront import payment regime, allowing offshore banks and external financiers to pay under the buyer’s credit.

Currently, domestic banks are allowed to make such an advance payment against imports under the buyers’ credit.

From now on, the external foreign financiers, as well as the representatives of local banks like the offshore business units, will be able to meet such advance payments requirement.

This is meant to facilitate the imports, whose growth is still slow.

Bangladesh is an import-dependent country and increased import helps the country attain the expected economic expansion.

In the meantime, the Bangladesh Bank, in its circular issued on Thursday, said that in view of the growing trend in imports under the short-term buyer’s credit, a decision on advance payments against permissible imports may also be executed directly by external financiers and/or offshore banking operations of banks.

But it is subject to the repayment guarantees irrespective of amount acceptable to ADs (authorised dealers) received from banks abroad and compliance with other relevant instructions contained at the guidelines concerned.

In this context, ADs shall observe extended due diligence with regard to the transactions, including KYC and AML/CFT standards. ADs shall also satisfy themselves regarding the enforceability of repayment guarantees.

This circular signed by Md Shahidul Islam, general manager (in-charge) was issued with immediate effect.

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