Bangladesh bank eases rules for industrial imports

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The Bangladesh Bank (BB) has announced new rules that let importers use a letter of agreement for their purchases rather than the conventional letter of credit (LC), which is a major step toward easing industrial imports.

Imports into specialised economic zones, such as Export Processing Zones (EPZs) and Economic Zones (EZs), are the focus of the updated directives. To guarantee that companies have easy access to foreign goods through standard procedures, they also include facilities for short-term import financing.

In order to fulfil their import responsibilities, importers can now independently obtain short-term overseas loans under the new regulations. Additionally, overseas lenders can offer guarantees, standby letters of credit (SBLC), or LCs to suppliers, enabling the principal and any related interest to be repaid on terms that are mutually agreed upon.

To further improve importers’ financial flexibility, the central bank has also generally approved corporate, personal, or third-party guarantees to help with short-term import credit.

The bank’s circular states that commercial imports will be eligible for a short-term foreign credit facility with a maximum 60-day payback period under this updated arrangement, giving industrial businesses involved in international trade the help they need.

According to industry experts, the new rule will simplify imports under sales contracts and resolve any misunderstandings over “third-country imports” and “third-country LCs.” They think it will make doing business with well-known providers easier.

Despite the Import Policy Order’s existing policy support, a central bank official pointed out that there has been a significant amount of market misunderstanding surrounding imports made without LCs. Clarifying these procedures and promoting imports under contracts while lowering banks’ exposure are the goals of the most recent circular.

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