Play store
Bangladesh Bank has allowed eligible private industrial enterprises to open foreign currency (FC) accounts to hold and use proceeds from approved medium- and long-term foreign loans.
The move will make it easier for companies to manage approved foreign financing and make payments for imports, services and loan instalments, according to a circular issued by the central bank on Wednesday.
Under the new guidelines, authorised dealer (AD) banks can open FC accounts in the names of eligible borrowers to hold foreign currency received from approved foreign loans and use the funds in line with loan approvals and agreements with foreign lenders.
Private industrial enterprises can obtain medium- and long-term foreign financing subject to approval from the relevant authorities, including the Investment Bangladesh Authority’s Foreign Loan/Suppliers’ Credit Scrutiny Committee, Bangladesh Bank and/or the Standing Committee on Non-Concessional Loans, as applicable.
Foreign currency held in the accounts can be used to pay for imports in accordance with the applicable import policy and foreign exchange regulations.
The funds can also be used to pay for genuine services required for projects being implemented under approved foreign loans.
For approved local purchases or procurement, foreign currency held in the FC accounts can be converted into taka. Account holders may also earn interest or profit on the balances, subject to applicable terms agreed between the bank and customer.
The circular also allows companies to maintain foreign currency in the accounts for repayment of foreign loan instalments.
Where a loan agreement requires funds to be set aside for repayment, the FC account may remain open until the maturity of the loan. However, the account balance cannot exceed the amount required to pay the next three loan instalments.
The central bank said companies must use the funds only for approved purposes and in accordance with the terms of the foreign loan agreements, while complying with existing foreign exchange regulations.