EDF loans can be repaid in three instalments

The Bangladesh Bank has allowed exporters to repay loans taken from the Export Development Fund (EDF) in three instalments.

Earlier, such loans had to be repaid at once.

On Thursday, the Bangladesh Bank’s Foreign Exchange Policy Department issued a circular in this regard and sent it to all authorised dealer (AD) banks engaged in foreign exchange transactions.

The circular said exporters would be able to partially repay EDF loans. A maximum of two partial repayments can be made during the loan tenure while the remaining amount has to be repaid in a single instalment.

The Bangladesh Bank provides exporters with foreign currency refinancing from the EDF to import production materials. The tenure of EDF loans is 180 days, subject to the approval of the central bank, and this period can be extended by another 90 days.

Exporters said repaying the entire EDF loan at once was a problem for them previously as the full export income cannot always be obtained at once.

The circular said exporters would be able to partially repay EDF loans in instalments only after receiving export proceeds.

In another circular, the same department of the central bank said banks must check whether exporters have fully repatriated export proceeds to the country before giving incentives or approving EDF loans.

In a third circular, the Foreign Exchange Policy Department said it has been decided to extend the usance period to up to 360 days from 180 days for importing raw materials of the pre-fabricated steel structure industry.