Bangladesh Bank has introduced new measures to simplify imports for industrial establishments, allowing them to proceed without a traditional letter of credit (LC) through a letter of agreement, a significant shift aimed at boosting trade flexibility.
In a circular issued Thursday by the central bank’s Foreign Exchange and Policy Department, the new directives will primarily benefit imports into specialized economic zones such as the Export Processing Zones (EPZs) and Economic Zones (EZs). The circular also 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. Furthermore, 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.
In addition, Bangladesh Bank has granted general approval for corporate, personal, or third-party guarantees to facilitate short-term import credit. This gives importers more flexibility in managing their financial obligations.
The circular specifies that commercial imports under the agreement will benefit from a short-term foreign credit facility with a repayment period of up to 60 days, offering an additional layer of support to industrial enterprises engaged in foreign trade.
Industry insiders have welcomed the move. They highlighted that the new system removes ambiguities related to third-country imports or third-country LCs.
