Written by The Banking Post
The Bangladesh Bank has revised its policy on deferred payment imports, allowing industrial raw materials — including back-to-back imports — as well as agricultural implements and chemical fertilisers to be brought in under supplier’s or buyer’s credit for a usance period of up to 270 days.
Under a notification issued on Monday, the central bank said the allowable usance period will now be capped at 270 days or the importer’s cash conversion cycle, whichever is shorter. The move trims back the earlier flexibility granted in August, when the usance period was extended to as much as 360 days from the previous 180 days, a facility that remains valid until December 31, 2025.
A usance period refers to the time allowed to an importer to settle payment for goods after receipt, typically under letters of credit in international trade.
The central bank has instructed authorised dealer banks to ensure that the estimated cash conversion cycle reflects a realistic assessment of a client’s business, based on historical operating and transaction patterns, before approving such facilities.
For back-to-back letters of credit, the usance period will be aligned with the statutory timeframe for repatriation of export proceeds.
The Bangladesh Bank also reiterated that the extended usance facility will not apply to imports financed under the Export Development Fund.
