The central bank is making modalities for an alternative payment mechanism with Russia for trade amid multiple sanctions, including SWIFT ban, imposed on the country following its war with Ukraine.
It is expected to send the modalities to the Economic Relations Division (ERD) within shortest possible time, according to officials.
The regulator will also inform the Ministry of Commerce (MoC) and the Financial Institution Division (FDI) of the matter.
After receiving the modalities, the ERD is likely to communicate with the Russian Federation with a proposal to confirm the system.
When contacted, a senior official, who preferred anonymity, said: "Bangladesh Bank (BB) has been asked to fix the modalities on an alternative payment system for Bangladesh-Russia bilateral trade."
Earlier, the BB proposed three systems, including SWAP. But it will now finalise or choose one modality and send it to the ERD for the next course of action, added the official.
Dhaka is desperately hunting for another payment system as bilateral trade suffers a setback due to sanctions by the US and its allies, according to a source.
To this end, state agencies, including finance and commerce ministries, and BB, recently sat to devise strategies to choose a workable method, he said.
A high official of the commerce ministry said, "We have forwarded the recommendations, made at the meeting, for alternative financial transaction links with Russia."
Last September, the Bangladesh mission in Russia sent a report to commerce ministry to take alternative payment systems for exporting goods amid the US-led Western sanctions against Russia.
If sanctions last for long, it feared, there are possibilities of hyperinflation and economic turmoil only to adversely impact the bilateral trade.
Trade will suffer to a great extent until and unless there is a free and safe payment system, it maintained.
Multiple sanctions against Russia followed its invasion of Ukraine, almost cutting the nuclear power off the rest of the world.
The impasse comes with series of restrictions, boycott, isolations and supply-chain blockade only to make a multiplier impact, according to the embassy report.
There is also a strong fear of secondary sanctions in case of doing business with Russia, it said.
According to a source, a proposal was mooted for doing trade in national currencies between Bangladesh and Russia for some time.
Central banks of both countries sat in multiple meetings over the issue. However, things still remain unsettled for lack of an agreement on any accepted business process.
Currently, Russian policymakers are counting on being able to trade in their national currency 'ruble'.
They also give attention to "barter" mechanism for foreign trade. Russia has been doing some international transactions in cryptocurrency with Brazil, Indonesia and African countries.
Besides, the Russian authorities and companies are finding options to stop relying on dollar and euro. Russia is now increasingly turning to Chinese yuan.
The embassy said payments through ruble, yuan or cryptocurrency are all experimental now and need some time to make a pragmatic decision.
Following a close view of the payment systems by several countries, it suggested taking any one or two from the three payment methods in near future, not now.
Some Russian banks are still operating with SWIFT systems that come with great uncertainty and problems. In many cases, payments take much time to settle.
Although Russia has its own system in place called FSPS and MIR, these are mainly functional for domestic banking and credit cards.
Bangladeshi chiefly exports apparel, almost 90 per cent, to Russia. As major buyers like H&M and ZARA have suspended their operations in Russia, Bangladesh faces an acute shortage of orders from Russia.
H&M, being the largest importer having 650+ retail stores and import share of more than half, is very tough to be replaced by local importers.
There are speculations on withholding or cancelling orders from the importers. Transport costs have become very high to and from Russia.
The same applies to other Bangladeshi major exportables like jute, shrimp and tobacco. Shrimp being costly food is likely to witness a decline in demand amid potential recession in Russia.
Dhaka also considers establishing an 'electronic platform' to facilitate bilateral export-import trade with Moscow, which proposed the mechanism amid sanctions due to the war.
The MoC and ICT Division would implement the platform project after consultation with the stakeholders concerned, said a senior official.
Bangladesh's exports to Russia started falling since March 2022 and it is likely to fall drastically in fiscal year (FY) 2022-23.
Negative export growth of 55.16 per cent in July is already there mainly due to the SWIFT ban, according to the embassy letter.
The volume of exports to Russia was $638.30 million in FY 2021-22.
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