Credit facility widens to augment import activity

Credit facility for post-import financing widens under a policy change aimed at augmenting overall import activity to give a fillip to Bangladesh's economic rebound.

The central bank Tuesday revised the post-import financing policy, bringing more imports under credit facility and extending the repayment timeline, officials said.

Post-import financing is a short-term credit facility available to importers to meet import payments.

The Bangladesh Bank (BB) drew up a detailed policy guideline on post-import financing (PIF), first of its kind in the country's banking sector, in June of 2021.

Earlier, there were two areas under the facility: import payments for consumer products and industrial raw materials. Another two areas of imports come under the post-import financing. The two are non-consumer trading goods and agricultural import goods.

The central bank extended the PIF duration for industrial raw materials by 30 days. Earlier, the time was 180 days, and now the timeline extends to 210 days.

The PIF period for consumer products will remain the same as 90 days. But it has specified the consumer products as rice, pulses, onions, garlic, spices, and edible oils.

The non-consumer trading goods' PIF period will be 120 days.

The PIF period for imported agricultural goods will be 180 days.

Importers and exporters welcome the revised policy on the PIF, saying that it will help "ease repayment of loans to the banks".

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