Written by The Banking Post
Bangladesh Bank has eased rules on the retention of advance remittances against exports, allowing exporters to access the full amount of payments received upfront.
The central bank announced the move on Thursday, waiving the previous requirement to keep back 10 percent of advance proceeds with banks until shipments were executed. Officials said the step is aimed at improving exporters’ cash flow, particularly for smaller firms struggling with thin margins.
Under the revised rules, banks can now release the entire advance amount to exporters, provided due diligence is conducted. Exporters must present an irrevocable letter of credit or contract, show satisfactory past performance, and prove their capacity to execute orders. Advance payments will remain interest-free.
In cases where exports are not executed, authorised dealer banks may refund advance payments, first from the Exporters’ Retention Quota account and then from Taka accounts, according to the circular.
Business leaders welcomed the relaxation, saying it would help exporters secure raw materials and keep operations running amid global trade headwinds. Oversight by banks is expected to ensure compliance and prevent misuse.
