Regulatory Alerts2025-05-29
Added
FEPD Circular Letter No. 19: Guarantees favoring local project authorities on behalf of residents
Authorized Dealers in Bangladesh may settle payments in foreign currency via the RTGS system if guarantees favoring local project authorities on behalf of residents are revoked. For guarantees issued on behalf of joint ventures, consortia, or associations involving foreign partners, Authorized Dealers must verify that proportionate collaterals, such as bank guarantees or SBLCs, are provided by those foreign partners. These amendments modify the conditions under which bid bonds, performance bonds, and guarantees are issued in foreign currency, while other relevant instructions remain unchanged.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd FE Circular Letter No. 19 Date: May 29, 2025 Head offices/principal offices of all Authorized Dealers in Bangladesh Dear Sirs, Guarantees favoring local project authorities on behalf of residents Please refer to paragraph 11, chapter 16 of the Guidelines for Foreign Exchange Transactions-2018, Vol-1 in terms of which Authorized Dealers (ADs) are allowed to issue bid bonds/performance bonds/guarantees favoring local project authorities on behalf of residents in foreign currency on the condition that in case the guarantee is invoked the claim thereagainst would be paid only in Taka. 02. Given the actual requirement of respective project authorities as per tender documents, ADs may settle payments in foreign currency, in case of revocation, through RTGS-system. For issuance of guarantees on behalf of joint ventures/consortiums/ associations between resident entities and foreign partners, ADs shall satisfy themselves regarding coverage of proportionate collaterals (such as bank guarantees, SBLCs) from foreign partners.
Other relevant instructions shall remain unchanged. Please bring the contents of this circular letter to the notice of your clientele. Yours faithfully, (Md. Harun-Ar-Rashid) Director (FEPD) Phone: 9530123