Dhaka, Bangladesh (BBN) - The central bank of Bangladesh has relaxed its rules allowing importers to arrange loans from overseas sources for industrial imports through purchases/sales contracts without letter of credits (LCs).
Importers may also enjoy maximum 60 days credit facility against commercial imports without LCs, according to a notification, issued by the Bangladesh Bank (BB), the country’s central bank, on Thursday.
Import Policy Order (IPO) permits industrial imports through contracts without LCs, with commercial imports up to US$ 0.50 million in a year.
“Importers may arrange short term financing from external sources at such cost,” the notification said, adding that the financing arrangement may include LCs/SBLCs (standby LCs)/guarantee to suppliers by external lenders.
Short term loans on account of import payments and financing costs may be effected as per underlying arrangements, it noted.
The notification also said commercial imports without LCs within the prescribed limit of IPO in force will be executable only on document against payment basis, unless otherwise permitted on usance basis.
“General permission is given for usance facilities up to 60 days against commercial imports of admissible goods without LCs within the provision of IPO in force and subsequent notifications,” the central bank explained.
General waiver has been given to importers for issuance of corporate guarantee, personal guarantee, and third party guarantee favoring foreign lenders/importers against admissible imports, according to the notification.
Besides, imports are admissible under purchases/sales contracts for enterprises operating in specialized zones like Export Processing Zones, Economic Zones, Hi-Tech Parks, and other zones declared by the government.
However, short term external borrowing for imports of permissible goods is permitted within the cost ceiling as prescribed from time to time by the central bank.
BBN/SSR/AD