Foreign banks can locally borrow against overseas guarantees
In another circular, the central bank waived a provision of taking its approval in case of dividend repatriation by foreign companies operating in Bangladesh
Banks and non-bank financial institutions from now oncan provide loansin local currency to foreign firms against an overseas guarantee which was restricted previously.
The overseas guarantee has been allowed considering the pandemic situation, said a circular of the Bangladesh Bank issued on Tuesday.
The provision will be applicable till June 30, 2021, according to the circular.
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The circular also said the guarantee shall be acceptable to lending banks and non-bank financial institutions. No fees shall be payable against the guarantee. The Bangladesh Bank shall immediately be intimated in case of encashment of guarantees due to payment defaults by borrowers.
In another circular issued on the same day, the central bank waived a provision of taking its approval in case of dividend repatriation by foreign companies operating in Bangladesh.
Before taking up for processing a remittance application, the assistant director shall check whether the agent/office concerned of the airlines, shipping companies, courier service companies, freight forwarders, stock brokerage firms, satellite channel distributors, railway company etc are operating in Bangladesh with the permission from competent government authorities.
This provision is not applicable now in case of dividend repatriation, according to the circular.
