Bangladesh Bank waives 10% retention requirement on advance export payments

Bangladesh Bank has waived the requirement for exporters to retain 10 percent of export proceeds received in advance from overseas buyers, in a move aimed at boosting cash flow and easing trade settlement.

The revised instructions would provide exporters quicker access to funds while ensuring safeguards for genuine transactions, according to a circular from the central bank today.

As per the new guidelines, exporters must have a confirmed letter of credit (LC) or contract to execute shipments. Their past export performance must also be satisfactory, and they will need to demonstrate adequate capacity to fulfil the export order.

The central bank further said the advance payment must be interest-free, among other conditions.

Business insiders noted that the relaxation will help exporters procure raw materials and continue operations amid global trade challenges, while banks will oversee compliance to ensure accountability.