Regulatory Alerts2024-11-27
Added
BRPD Circular Letter No. 50: Loss from exchange rate fluctuations during settlement of import liability
The document instructs scheduled banks in Bangladesh to recognize unexpected exchange rate losses incurred by specific industries (steel, cement, and price-controlled sectors) on import raw materials purchased between January and December 2022. Banks must calculate the loss as 80% of the difference between the exchange rate at settlement and the rate at the letter of credit establishment, applied to the foreign currency amount. This calculated loss amount may be restructured as a separate term loan with a maximum tenure of eight years and a one-year grace period, subject to credit risk analysis, non-default status of the borrower, and compliance with single borrower exposure limits. Customers must apply for this facility by March 31, 2025, and banks must retain supporting documentation for inspection by the Bangladesh Bank's inspection department.