The Bangladesh Bank (BB) Wednesday issued a circular to this effect and another order on smoothing forex earnings through IT-enabled outsourcing services.
Economists see the twin-move as a measure to discourage the outflow of foreign currencies, at a time when Bangladesh-and many other countries for that matter-runs short of foreign-exchange reserves to pay exorbitant import bills against falling export and remittance earnings.
A usance or a deferred letter of credit (LC) means that even after buyers have received goods or services, they get a grace period to make the payment to banks or other lenders.
The circular issued by the Foreign Exchange Policy Department of the BB says, "The policy support has now been extended till June 30, 2023, instead of December 2022."
The extended usance period, however, will not be applicable to the imports made using loans from the Export Development Fund of the central bank.
In January 2022, the central bank of Bangladesh pushed back the usance period to 270 days from 180 days.
In the other order the Bangladesh Bank said the authorized dealer (AD) branches "may issue encashment certificates" to those who export information technology-enabled services (ITES), for example, outsourcing-related services.
The authorised dealers will issue such certificates on the request from the mobile financial service providers (MFSP), for example, bKash.
The BB in a circular issued February 10, 2021 started allowing MFSP to repatriate export proceeds on account of ITES exports.
A large number of people involved in a number of outsourcing businesses earn huge foreign exchange for the economy.
A large number of them have tax files, and they need to submit such encashment certificate with their tax files.
The BB circular, signed by Md. Sarwar Hossain, director of the Foreign Exchange Policy Department (FEPD), reads: "It has been decided that ADs maintaining settlement accounts may issue encashment certificates in support of remittances on request from MFSPs electronically."
It also states: "In this case, the request needs to be supported by auto-generated information - beneficiary's name, wallet-account number, the amount in Taka, date of credit - from remittance-service provider abroad."
jasimharon@yahoo.com