FE Circular No. 15 : Payment through Asian Clearing Union ( ACU)

Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka website : www.bangladeshbank.org.bd 08 Poush , 1415 FE Circular No. 15 Date: ------------------- 22 December, 2008 All Authorized Dealers in Foreign Exchange in Bangladesh Dear Sirs, PAYMENT THROUGH ASIAN CLEARING UNION ( ACU) Reference is drawn to the Para No. 2, Chapter 3 of the Guidelines for Foreign Exchange Transactions (GFET) 1996 (Vol￾1), Appendix 2 of the Guidelines for Foreign Exchange Transactions (GFET) 1996 (Vol-2), FE Circular No. 01, dated 01/01/2001 and FE Circular No. 13, dated 22/09/2008 regarding instructions relating to payment through ACU mechanism, reporting of such transactions thereof and paying/allowing interest in ACU nostro accounts. It has been decided by the Board of Directors of the Asian Clearing Union that with effect from 01.01.2009 settlement of transactions among ACU member countries may also be done in 'EURO'. The Authorised dealers are advised to follow the following instructions in this regard :

1. In view of the above decision, Para 2, Chapter-3 of the GFET 1996 (Vol-1) is to be read as under: "2. (a) The central Banks of Bangladesh, India, Iran, Nepal, Pakistan, Sri Lanka, Myanmar and Bhutan have an Agreement to settle current transactions between these countries through the Asian Clearing Union(ACU) mechanism. All such payments to the ACU member countries excepting those covered by loan/ credit agreements are accordingly settled through the Asian Clearing Union (ACU) mechanism in "Asian Monetary Units" which may be referred to in the abbreviated form as " AMUs". The Asian Monetary Units shall be denominated as 'ACU Dollar' and 'ACU Euro' which shall be equivalent in value to one US Dollar and one Euro respectively. . (b) The ACU Agreement referred to above provides for settlement of the following types of payments: (i) Payments from residents in the territory of one participating country to residents in the territory of another participating country. (ii) Payments for current international transactions as defined by the Articles of Agreement of the International Monetary Fund. (iii) Payments permitted by the country in which the payer resides. (c) ADs shall maintain nostro accounts in AMUs ( ACU Dollar, ACU Euro) with their correspondent banks in ACU member countries for the purpose of settlements through ACU. Similarly accounts in AMUs (ACU Dollar and ACU EURO) may be opened by the ADs in their books in the names of their correspondents in ACU member countries. ADs may pay interest on the balance of Nostro Accounts in AMUs as per mutually agreed terms and conditions with the correspondent(s). cont'd to page 2

-02- (d) An AD needing to fund its AMU nostro account with a correspondent bank in an ACU member country shall do so through Bangladesh Bank against surrender of the required amount in AMU, or of equivalent taka at Bangladesh Bank's selling rate. Bangladesh Bank will advise the central bank of the concerned ACU member country to make the amount available to the transferee bank in that country. After making the payment, the central bank of the recipient ACU member country shall advise the Secretary General of the ACU Secretariat to credit its account by debit to Bangladesh Bank's account. (e) For repatriating funds from an AMU nostro account with a correspondent bank in an ACU member country an AD shall advise the correspondent bank to route the payment through the central bank of that country, which will advise Bangladesh Bank to make the amount available to the recipient AD. Bangladesh Bank on receipt of the advice, shall make the fund available to the recipient AD (either in AMU or in equivalent taka at BB's buying rate, at the AD's option) and shall advise the Secretary General of the ACU Secretariat to credit its account by debit to the account of the central bank of the transferor ACU member country. " 2. Separate Statement ( for S-2) for ACU Dollar and ACU EURO While reporting in Statement S-2, the ADs should use code 98 for ACU Dollar and code 47 for ACU Euro ( Attached please find the revised Statement S-2 format). 3. Currency Code for S-10 and S-11 For reporting of ACU transactions in S-10 & S-11 ( OBU & KAFCO transactions as per FE Circular No. 13, Dated￾22/09/08), AD and OBU will use ACU currency code 98 for reporting ACU transactions in ACU Dollar and 47 for reporting ACU transactions in ACU EURO. Authorised dealers are advised to submit their monthly returns as per above instructions from February 2009 (return for the month of January 2009). Please bring these instructions to the notice of all concerned. Meanwhile please acknowledge receipt hereof.

Yours faithfully, (Ahmed Ehteshamul Haider) Deputy General Manager Phone: 7120375.

STATEMENT S⎯2 FE-12 For Transactions ACU member Countries under ACU mechamism For Bangladesh Bank's use AMOUNT P U R C H A S E S Cr. Lac Th. Unit Raw Jute 8881 Jute goods 8882 Ready made Garments 8883 Others 8884 A. From Abroad:-

1. Exports (Schedule A-1/0-1, A-2/0-2) Sub-Total: 9991
2. (a) Amounts equivalent to $ 2,000 and above other than for exports (covered by Form 'C' and Schedule J-1 attached). J-1 covers purpose codes from 0001 to 5999 of Code-5…………. (b) Amounts equivalent to $ 2,000 and above other than for exports (covered by Form 'C' and Schedule J-2 attached). J-2 covers purpose codes from 6001 to 9999 of Code--5…………… 9992 9993
3. (a) Amounts equivalent to below $ 2000 other than for exports (IRV-1 attached). IRV-I Cover Purpose codes from 0001 to 5999 of Code 5……………….. (b) Amounts equivalent to below. S 2,000 other than for exports (IRV-2 attached) IRV-2 covers purpose codes from 6001 to 9999 of Code 5……………….. 9994 B. Exchange, Transfers and Adjustments:- Sub-Total:
4. Purchases from overseas branches and correspondents for credit of the Taka equivalent to non-resident bank account (Schedule 'H' attached )…………………. 6010
5. Purchases against sales of other foreign currencies (Schedule 'B')………………. 6011
6. Purchases from other Authorised Dealers and Branches in Bangladesh maintaining a separate currency position (Schedule 'C')……………………………. 6012
7. Purchases from Bangladesh Bank (Schedule 'D' )…………………………… 6013
8. Branch transaction adjusted through this account (Schedule 'O')…………………….. 6014
9. Receipts by way of transfer from FES-7 and FCS-8 for payment through this account ........................ 6016
10. Purchases on account of others ( state) : i) ......................................... ii) ....................................... 6015 *Opening Balance ( Dr.) 6210 *Credit Balance ( Cr.) 6410 GRAND TOTAL Statement of transactions for the period ended Name of Authorised Dealer Currency AMU (Please use currency code 98 for ACU Dollar and 47 for ACU EURO)------------ See Chapter 2 Para 5 APP. 2

SALES Cash (Schedule E-2/P-2) 0000 A. Abroad :⎯

1. Imports (Schedule )………………………… Grants/Loans/sup. Credits (Schedule EL-1/2/3) 0001
2. Invisible (Schedule E-3/P-3). E-3/P-3 covers purpose codes from 0001 to 5999 of Code 7 ……… 1001
3. Miscellaneous (Schedule E-4/P-4) E-4/P-4 covers purpose codes from 6001 of to 9999 of Code 7.... 1002 Sub Total : B. Exchanges, Transfers and Adjustments: ⎯
4. Sales of foreign currencies to the debit of non-resident bank account**………………… 2010
5. Sales against purchases of other foreign currencies (Schedule 'F')………………………. 2011
6. Sales to other Authorised Dealers and Branches in Bangladesh maintaining a separate currency position (Schedule 'G')……………………………….. 2012
7. Sales to Bangladesh Bank (Schedule 'D')……………………………. 2013
8. Branch transactions adjusted through this account (Schedule 'P') 2015
9. Sales on account of others (State) : i)…..……………. ii).………………. 2014 *Opening Balance(Cr.)………………………….. 2210 *Closing Balance(Dr.)…………………………… 2410 GRAND TOTAL : **Total of currency must agree with those reported on Schedule 'M' attached to S-4 Statement.

• Delete not applicable.
• Note : By definition each ACU Dollar is equivalent to one US Dollar and each ACU EURO is equivalent to one EURO. Signature and Stamp of the Authorised Dealer