Regulatory Alerts2025-02-12
Added
FEPD Circular Letter No. 10: Issuance of repayment commitments as collaterals against external borrowing by resident entities
The cash margin requirement for Authorized Dealers issuing repayment commitments on behalf of resident borrowers favoring foreign lenders is increased from 5 percent to 25 percent. Additionally, borrowers must maintain adequate funded credit lines with their respective banks. These changes amend the conditions previously set in FE Circular No. 23 of June 21, 2021, while other relevant instructions remain unchanged.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd
FE Circular Letter No. 10 Date: February 12, 2025 Head offices/principal offices of all Authorized Dealers in Bangladesh Dear Sirs, Issuance of repayment commitments as collaterals against external borrowing by resident entities Please refer to FE Circular No. 23 of June 21, 2021 in terms of which Authorized Dealers (ADs) are permitted to issue repayment commitments on behalf of resident borrowers favoring foreign lenders, subject to eligible collaterals with 5 percent of the commitmentamount in cash margin, among others. 02. It has been decided to enhance cash margin to 25 percent from 5 percent. In addition, the borrowers shall have adequate funded credit line with respective banks. 03. Other relevant instructions shall remain unchanged. Applications to Bangladesh Bank for issuance of repayment commitments are subject to compliance with FE Circular No. 23/2021 including above instructions. Please bring the contents of this circular letter to the notice of your clientele. Yours faithfully, (Md. Harun-Ar-Rashid) Director (FEPD) Phone: 9530123