Regulatory Alerts2015-07-08
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FEPD Circular Letter No. 10 : Issuance of guarantee against foreign currency loan
Authorized Dealers in Foreign Exchange in Bangladesh are clarified to not require prior approval from Bangladesh Bank to issue guarantees, such as corporate, personal, or third-party guarantees, favoring foreign lenders. This exemption applies specifically to external borrowing by industrial enterprises that have been approved by the Board of Investment. The clarification supplements F.E. Circular No. 06 dated January 30, 2014, which previously allowed Authorized Dealers to hold collaterals on behalf of foreign lenders for such approved borrowings without prior approval.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd F. E. Circular Letter No. : FEPD(A&NFBP)/103/2015‐ 10 Date: 08 July 2015 All Authorized Dealers in Foreign Exchange in Bangladesh Dear Sirs, Issuance of guarantee against foreign loan. Please refer to F.E. Circular No. 06, dated January 30, 2014. 02. As per above mentioned circular ADs may, without prior approval of Bangladesh Bank, hold collaterals on behalf of foreign lenders in respect of external borrowing by industrial enterprises as approved by Board of Investment. It is now being clarified that approval of Bangladesh Bank is not required to issue guarantees such as corporate guarantee, personal guarantee, third party guarantee etc. as per loan agreement, favoring foreign lenders, as such the loan approved by Board of Investment. Yours faithfully, (Md. Zakir Hossain Chowdhury) Deputy General Manager Phone: 9530250
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