Dhaka, Bangladesh (BBN)- The central bank has allowed all commercial banks to discount accepted bills against letters of credit (LCs) for import aimed at facilitating foreign trade, officials said.
The central bank has issued a directive in this connection recently and asked all scheduled banks to allow discount on such bills with discretion.
“….this is to clarify that authorised dealers (ADs), generally known as authorised foreign exchange dealers’ banks, are free to allow discount or purchase accepted usance or deferred bills against import from abroad on banker customer relationship applying due diligence, the BB said in its directive issued on September 27 this year.
“The central bank has issued the directive in line with the existing guidelines for foreign exchange transactions to facilitate the banks,” a senior official of the Bangladesh Bank (BB) said.
According to the guidelines, purchases by the ADs of usance bills covering imports into Bangladesh result in the payment by them in foreign currency or a payment in the local currency to a non-resident account, whereas, they do not receive payment for the bills from the importer pending maturity and thus the transactions result in the extension of credit facilities to the importer in Bangladesh.
The BB has taken the latest move after allowing Offshore Banking Units (OBUs) to allow discount on such bills in line with bankers' and importers' demands.
Under the provisions, the OBUs may allow discount on bills accepted by ADs in Bangladesh against import under LCs opened on deferred or usance basis applying due diligence.
On September 5 last, the BB issued a circular in this connection asking chief executives of all 47 scheduled banks to follow the new directive regarding discounting of accepted bills at OBUs.
On December 17, 1985 the BB issued guidelines on establishment of OBUs in Bangladesh. OBUs are treated as non-resident entities for exchange control purpose.
BBN/SI/AD-03Oct10-9:03 pm (BST)
