Regulatory Alerts2022-03-14
Added
Retention of export proceeds in foreign exchange
Authorized Dealers in Foreign Exchange in Bangladesh are now permitted to retain export proceeds received in advance, as declared on an Advance Receipt Voucher (ARV), in foreign exchange. This retention is allowed according to paragraphs 41 or 42 of chapter 7 of the Guidelines for Foreign Exchange Transactions-2018 (GFET), depending on whether the funds are for settlement of back-to-back Letters of Credit (LCs) or other import bills. This decision by Bangladesh Bank extends the existing retention rules to cover advance export receipts.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd FE Circular No. 04 Date: March 14, 2022 All Authorized Dealers in Foreign Exchange in Bangladesh Dear Sirs, Retention of export proceeds in foreign exchange Please refer to paragraph 41, chapter 7 of the Guidelines for Foreign Exchange Transactions-2018 (GFET), volume 1 permitting relevant portion of export proceeds to retain in foreign exchange in the subsidiary ledger of Authorized Dealers (ADs) concerned for settlement of back to back (BTB) letters of credit (LCs). Paragraph 42(i) ibid permits ADs to maintain export proceeds, on encashment of value added portion, in single pool for settlement of BTB LCs. Export proceeds are also permissible, as per paragraph 42(ii) ibid, to be retained in foreign exchange for a period of 30 days for settlement of import bills other than BTB LCs. 2. To facilitate export trade, it has now been decided that export proceeds received in advance as declared on Advance Receipt Voucher (ARV) in accordance with paragraph 20, chapter 8 of GFET may be retained in foreign exchange as per paragraph 41 or 42 of chapter 7 ibid depending on the nature of import bills. Other relevant instructions shall remain unchanged. Please bring the contents of this circular to the notice of your clientele concerned. Yours faithfully,
(Kazi Rafiqul Hasan) General Manager Phone: 9530123