Regulatory Alerts2025-02-09
Added
FEPD Circular Letter No. 06: Retention of export proceeds in back to back settlement pool
Authorized Dealers are permitted to transfer unencumbered funds from their foreign currency back to back settlement pool to other Authorized Dealers for the bona fide use of exporters and their sister concerns, provided the transfer does not exceed the Exporter’s Retention Quota entitlement. While the value added portion may be retained in the foreign currency pool for thirty days to settle bona fide payment obligations, any unused funds must be compulsorily encashed in Taka immediately after the thirty-day period expires. This directive applies to all Authorized Dealers in Bangladesh and requires them to notify their relevant customers of these provisions.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd FE Circular Letter No. 06 Date: February 09, 2025 Head offices/principal offices of all Authorized Dealers in Bangladesh Dear Sirs, Retention of export proceeds in back to back settlement pool Please refer to paragraph 42(i), chapter 7 of the Guidelines for Foreign Exchange Transactions-2018, Vol-1 (GFET) in terms of which Authorized Dealers (ADs) are permitted to retain repatriated export proceeds in back to back settlement pool in foreign currency (FC) on encashment of the local value added portion. Although this paragraph requires encashment of the local value added portion, FE Circular Letter No. 09 of September 04, 2023 allows the value added portion to be retained in the FC pool for a period of 30 days usable only for settlement of bonafide payment obligations of relevant exporters by designated ADs. 02. To facilitate export trade, ADs are allowed to transfer the unencumbered fund from FC pool, not exceeding permissible portion eligible as Exporter’s Retention Quota entitlement, to other ADs for bonafide use by exporters and/or their sister concerns in terms of paragraph 28(A)(ii), chapter 13 of GFET. As usual, ADs shall encash the unused fund, if any, compulsorily in Taka just after expiry of 30 days. You are advised to bring the contents of this circular letter to the notice of your relevant customers. Yours faithfully,
(Mr. Harun-Ar-Rashid) Director (FEPD) Phone: 9530123