FEPD Circular Letter No. 21: Settlement of loans against Export Development Fund (EDF)

Authorized Dealers in Bangladesh are advised to refrain from forwarding applications for Export Development Fund (EDF) loans to customers whose liabilities were settled through funded facilities in the immediate past 180 days. This directive addresses the observation that EDF loans were being settled without repayment from realized export proceeds by extending new funded facilities, a practice that does not ensure the export of goods. The instruction applies irrespective of the nature of imports and requires dealers to comply with existing rules mandating EDF loan settlement upon receipt of export proceeds, except for eligible bulk importers using local delivery proceeds.

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Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka. www.bb.org.bd
FE Circular Letter No. 21 Date: June 29, 2022
Head offices/principal offices of all
Authorized Dealers in Bangladesh
Dear Sirs,
Settlement of loans against Export Development Fund (EDF) Please refer to paragraph 3 of FE Circular No. 45, dated December 31, 2017 in terms of which repayment of EDF loans needs to be settled on receipt of proceeds of the relative exports. This instruction is exempted in case of loans for bulk imports by member mills of eligible associations; with facility to use proceeds of local delivery retained in foreign currency as per paragraph 39(ii), chapter 7 of the Guidelines for Foreign Exchange Trnasactions-2009 (GFET) [paragraph 42(ii) as per 2018-edition] for settlement of EDF loans to eligible bulk importers.
02. It is observed that EDF loans are settled, without repayment out of realized value in
foreign currency, by extending funded facilities. The situation does not ensure export of goods for which EDF loans have been used. In view of the situation, you are advised to comply with the instructions in settlement of EDF loans and refrain from forwarding applications of EDF loans, irrespective of nature of imports, for customers whose liabilities have been settled through funded facilities in the immediate past 180 days. Please bring the contents of this circular letter to the notice of your relevant customers. Yours faithfully,

(Kazi Rafiqul Hassan)
Director (FEPD)
Phone: 9530123

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Source: Bangladesh Bank — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works