Banks can now open deferred import LCs for up to one year
This provision will remain in effect until December
Highlights
- Payment period for imported raw materials, agricultural inputs extended from 180 days to 360 days
- BB allowed delayed payments for imports to conserve foreign exchange reserves
- This facility does not apply to imports under Export Development Fund (EDF) loans
From now on, banks will be able to open deferred letters of credit for import up to one year.
The Bangladesh Bank issued a circular to this end on Monday (20 January), extending the payment period for imported raw materials and agricultural inputs from 180 days to 360 days.
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A senior official of a private bank said that opening deferred LCs or extending the payment period of import LCs will reduce the liquidity pressure on traders to some extent.
In addition, the payment burden of import LCs will be shifted to futures, which will provide relief to our foreign currency liquidity for the next few months.
The central bank's circular said the delayed payment limit has been extended for imports of raw materials for industries, including back-to-back imports, agricultural inputs, and chemical fertilisers.
The Bangladesh Bank has allowed delayed payments for imports to conserve foreign exchange reserves during the ongoing dollar crisis. This provision will remain in effect until December.
However, the circular specifies that this facility does not apply to imports under Export Development Fund (EDF) loans.
Earlier, the central bank had issued a circular on June 30 last year, which increased the delayed payment limit for these imports to 360 days, though the validity period lasted until December 31, 2024.
According to the new circular, customers cannot extend the payment period for foreign currency liabilities beyond the specified time.
The extension is expected to provide relief to the foreign exchange market.
