FEPD Letter No. 5373: General Instructions for Banks to Open LC in Foreign Currency against Supply of Goods in FC under International Tender

50119

Bangladesh Bank
(Central Bank of Bangladesh)
Head Office
Motijheel, Dhaka-1000
Bangladesh

Foreign Exchange Policy Department
Import Policy Branch

FEPD(Import Policy)123/2016-5373

Date: 15/06/2016

Managing Director/Executive Head
All Approved Dealer Banks engaged in Foreign Exchange Transactions Head Office / Principal Office.

Dear Sirs,

Context of Payment of Value in Foreign Currency against Supply of Goods Locally in Foreign Currency under International Tender.

1. In accordance with the directive of Paragraph 37 of Chapter 7 of the Guidelines for Foreign Exchange Transactions-2009, approved dealer banks may establish domestic back-to-back letters of credit in foreign currency on behalf of export-oriented establishments for the purchase of raw materials from local sources.

2. In addition to establishing domestic back-to-back letters of credit in foreign currency, domestic letters of credit in foreign currency may be established in favor of local contractors for the implementation of purchase orders of the relevant government authorities under international tenders. Payment of bill values against letters of credit established in foreign currency must be settled through Foreign Currency Clearing accounts held at Bangladesh Bank. The value received for bills may be retained in foreign currency for 30 days to cover necessary import expenses of the customer in accordance with the directive of Paragraph 39(ii) of Chapter 7 of the Guidelines for Foreign Exchange Transactions-2009.

You are requested to provide necessary instructions to all your approved dealer banks regarding the above matter.

Yours faithfully,

(Signature)

(Md. Zakir Hossain Chowdhury)
Deputy General Manager
Phone: 9530253
E-mail: mzhossain.chowdury@bb.org.bd

Phone: 88-02-9530010-75, 9530700-59, Fax: 88-02-9566212, www.bb.org.bd