Written by The Banking Post
In a major policy shift aimed at easing export procedures, Bangladesh Bank has allowed exporters to ship goods under open account credit terms backed by insurance coverage from local insurance companies. The central bank issued a circular on October 07, 2025 permitting banks to arrange payment undertakings or payment risk coverage from Bangladeshi insurers.
This move builds on an earlier provision which allows open account exports only against payment undertakings from designated institutions abroad.
According to the new circular, banks can now facilitate export transactions under open account credit terms through foreign currency-denominated insurance policies issued by local insurers. In case of non-receipt of export proceeds, insurance claims need to be settled in foreign currency, said the circular. As per the circular, reinsurance coverage can be obtained from foreign sources in compliance with the regulatory framework applicable for insurance companies.
The circular authorizes banks to offer post shipment finance to exporters against respective exports based on insurance coverage.
Industry insiders say the policy is likely to boost competitiveness of Bangladeshi exporters by reducing reliance on foreign institutions and enabling more flexible trade financing options.
