The Bangladesh Bank (BB) has amended the key provisions of its directive on Offshore Banking Units (OBUs) of scheduled banks, aiming to facilitate the country's foreign trade, officials say.
On Tuesday, it issued a notification amending the OBU guidelines, originally released on January 30 this year, to provide greater flexibility in extending trade-finance facilities through the Authorised Dealer (AD) banks.
Under the revised provisions, OBUs can now extend trade loans not only through ADs of their own banks but also via those of others, subject to a comprehensive risk assessment, including counterparty exposure and limit evaluation.
"Actually, it is a major step toward enhanced interbank collaboration in offshore financing operations," a senior central bank official has told The Financial Express, adding the latest amendment significantly widens this scope.
He also says such financing must comply with the existing prudential credit norms and due diligence requirements.
Earlier, OBUs were allowed to extend trade finance to enterprises located in both specialised and non-specialised zones through their own banks' AD branches in the form of buyer's credit, accepted bill financing, and similar instruments, according to officials.
For enterprises located in specialised zones, OBUs are now allowed to finance entities other than fully foreign-owned ones arranged through both their own ADs and those of other banks in the form of admissible trade finance instruments for the permissible tenure.
Similarly, for enterprises located in non-specialised zones, OBUs are now allowed to extend buyer's credit, accepted bill financing, and other permissible trade instruments through both their own AD branches and those of other banks, subject to proper risk assessment procedures, officials say.
"By allowing OBUs to work with ADs across different banks, the policy seeks to ensure more efficient utilisation of offshore liquidity, minimise transaction bottlenecks, and promote a more competitive financial landscape," another central banker tells The Financial Express.
Industry insiders have welcomed the move, saying the expanded framework will allow local exporters and importers to access a broader range of foreign currency financing options, particularly at a time when global trade and liquidity conditions remain volatile.
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