Regulatory Alerts2010-12-12
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FEPD Circular Letter No. 1693 : Opening LC against Sales Contract
The document clarifies that sight or usance letters of credit opened against export contracts are not unacceptable under foreign exchange regulations, as they are tantamount to back-to-back letters of credit. It notes that while the Import Policy Order 2009-2012 allows such openings, the applicability of bonded warehouse facilities remains subject to the National Board of Revenue. Authorized Dealer banks are instructed to confirm receipt and bring the content to the notice of all concerned.
“Translated into English” Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka. www.bb.org.bd Circular Latter No.FEPD (Import) 125/2010-1693 Date: December 12, 2010 Head Office/Principle Offices of All Authorized Dealer banks Dear Sirs, Opening LC against Sales Contract Paragraph 37, chapter 7 of GFET-2009 permits to open inland back to back letters of credit against export letters of credit, subject to availability of bonded warehouse facilities. Opening of letters of credit on sight or usance basis against export contracts is allowed in paragraph 23(19) of Import Policy Order 2009-2012. Such sight/usance letters of credit which are tantamount to back to back letters of credit are not unacceptable in the light of foreign exchange regulations. However, applicability of bond facilities is related to National Board of Revenue. 02. Please confirm receipt and bring the content of this circular letter to the notice of all concerned. Yours faithfully, Sd/- (Khandaker Abdus Salim) Deputy General Manager Phone: 7120375
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