Central bank in Bangladesh eases import rules for industrial set-ups

25 Oct '24

1 min read

Central bank in Bangladesh eases import rules for industrial set-ups

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Insights

The Bangladesh Bank has introduced new measures to simplify imports for industrial establishments, allowing them to proceed sans a traditional letter of credit by using a letter of agreement.
The decision is aimed at raising trade flexibility and will mainly benefit imports into specialised economic zones.
Importers can independently secure short-term foreign loans to settle import liabilities.

Bangladesh’s central bank recently introduced fresh measures to simplify imports for industrial establishments, allowing them to proceed without a traditional letter of credit (LC) by using a letter of agreement.

The decision is aimed at raising trade flexibility.

The new directives will primarily benefit imports into specialised economic zones, the Bangladesh Bank's foreign exchange and policy department said in a circular, which outlines provisions for short-term import credit, ensuring continued access to foreign goods under standard arrangements.

Under the new system, importers can independently secure short-term foreign loans to settle their import liabilities. Foreign lenders will be permitted to issue LCs, standby letters of credit (SBLC) or guarantees to suppliers, with both the principal loan amount and any associated interest to be repaid according to the agreed terms of the loan, domestic media outlets reported.

The bank has also granted general approval for corporate, personal or third-party guarantees to facilitate short-term import credit, offering importers more flexibility in managing their financial obligations.

Fibre2Fashion News Desk (DS)

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