The central bank has expanded financing support for exporters and local suppliers by allowing banks to purchase accepted usance or deferred bills in foreign currency before maturity under local back-to-back letter of credit (LC) transactions.
The move, expected to ease working capital pressure and improve cash flow management for businesses, particularly in the ready-made garment sector, extends a facility that was previously limited to foreign import transactions.
Industry insiders say the decision will strengthen liquidity support for local supply chains linked to export-oriented industries.
The Bangladesh Bank (BB) has amended its foreign exchange regulations through issuing a notification to facilitate smoother financing arrangements for exporters and suppliers operating under back-to-back LC mechanisms, officials said on Tuesday.
Under the BB's latest notification, banks may discount or purchase such accepted usance or deferred bills based on banker-customer relationships and normal banking practices, subject to the application of due diligence.
The move is expected to improve liquidity support for local suppliers, particularly in the ready-made garment sector, where back-to-back LCs are widely used for sourcing raw materials and intermediary goods, according to industry insiders.
They also said the new provision would help businesses obtain funds earlier against accepted bills, reducing working capital pressure and improving cash flow management.
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