Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has relaxed the foreign exchange regulations relating to advance payment against imports and payment of freight charges to chartered ship owners abroad to facilitate foreign trade, officials said.
“We have relaxed such regulations aiming to facilitate business activities, particularly in foreign trade,’ a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in the capital, Dhaka on Sunday.
The BB took the move in line with the country’s businessmen’s recommendations to help exporters send their exportable products timely, according to the official.
The central bank issued two separate circulars in this connection on Thursday and asked the commercial banks to follow the new instructions relating to advance payment against imports and payment of freight charges to chartered ship owners abroad properly.
Now a local exporting firm will be allowed to send maximum US$ 5,000 without any bank guarantee against a bonafide business purpose using their own Exporter’s Retention Quota (ERQ).
The new regulations also allow local importers to pay freight charges to chartered ship owners abroad without prior approval from the central bank.
Regarding advance payment against imports, the commercial banks concerned shall, on their own responsibility, have to arrange for repatriation of the remittance made in advance, in case the entry of goods into the country is not affected within the stipulated time, according to a circular.
While opening a back-to-back letter of credit (LC), the banks should adjust the value of advance payment to ensure the value addition requirement as stipulated in the import policy order (IPO) is not breached, it said, adding that before the advance payment, an authorized dealer (AD) bank must obtain a form of undertaking duly signed by the importer.
The central bank was very often approached by the banks to effect payment of freight charges to foreign ship owners for ships chartered by the importers in Bangladesh, they added.
“With a view to simplifying the procedure, it has now been decided to authorize ADs to remit such charges subject to observance of conditions,” the central bank said in another circular.
Under the conditions, the relevant bill of entry should be submitted as a proof that the goods have arrived in the country. On the other hand, the banks are convinced that the unit value of imported goods (including freight) is competitive with the value of such goods imported on the cost and freight (CFR) basis in the relevant period, according to the circular.