BRPD Circular No. 10: Acceptance and Purchase of Inland Bill

Ref: BRPD Circular No. 10 Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. July 11, 2012 BRPD Circular No. 10 Date: ------------------ Ashar 27, 1419

To Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh

Dear Sir,

Regarding acceptance and purchase of inland bills.

It has recently been observed that there is an increasing tendency to raise funds from banks by preparing accommodation bills against opened letters of credit in local and foreign currencies, even in the absence of genuine commercial transactions. In many cases, transactions involving the purchase of such accommodation bills are being carried out at the branch level of the bank, remaining unknown to the Head Office of the bank, which often exposes the bank's financial foundation to risk.

In this regard, it has been decided that until further instructions are issued, banks must obtain written prior approval from the Head Office of the bank instead of making decisions at the branch level for the purchase of all inland bills (IBP) in local and foreign currencies. Furthermore, no acceptance or payment shall be made for any goods underlying local or foreign currency letters of credit unless the actual delivery of the goods involved in the purchase is verified on-site.

These instructions shall be implemented immediately.

Please acknowledge receipt.

Yours faithfully,

(Md. Anowarul Islam) Deputy General Manager Phone: 9530094