BB announces policy on export against payment guarantees
The central bank has issued a policy allowing banks to export goods under open account credit terms instead of letters of credit (LCs) with foreign payment guarantees.
Under the new policy, exporters will be able to export without LCs.
The authorised dealer (AD) banks may allow exporters to ship goods on sales contracts under open account credit terms within the statutory period, if otherwise not extended, from the date of shipment, according to a notification, issued by the Bangladesh Bank (BB), on Tuesday.
“The policy will help to ease the export process and keeping exporters free from risks of payment realisation,” a BB senior official told the FE on Wednesday while explaining the main objective of notification.
Bangladesh export trade is dependent on the desire of foreign importers and export is, as per their instructions, executed under sales contracts without payment guarantees, according to the central banker.
Under the policy, the payment undertaker/insurer will arrange export payment in case of default by importers.