BB: No EDF for exporters creating forced loans

Exporters who took loans from Export Development Fund (EDF) in the last six months, but did not repatriate their export earnings in the timeframe dictated by regulations, will no longer be eligible for the EDF facility.

Those who do not repatriate their export earnings in 180 days create forced loans that have to be repaid by Taka instead of foreign currency.

The Bangladesh Bank has directed banks that repaid EDF credit through forced loans in the last six months not to forward such exporters’ applications seeking this special facility, read a circular issue by the regulator’s Foreign Exchange Policy Department (FEPD) on Wednesday.

However, any exporter who repatriates their export earnings and repays loans through foreign currency as per the rules will remain eligible to take loans from the EDF, and their loan application can be sent to the central bank.

The circular further stated that the banking regulator has observed that EDF loans are settled, without repayment out of realised value in foreign currency, by extending funded facilities. The situation does not ensure export of goods for which EDF loans have been used.

In view of the situation, banks are advised to comply with the instructions in settlement of EDF loans and refrain from forwarding applications of EDF loans, irrespective of nature of imports, for customers whose liabilities have been settled through funded facilities in the immediate past 180 days, it read.