Bangladesh Bank eliminated the mandatory retention policy that required exporters to deposit ten percent of advance payments with financial institutions. The central bank issued this directive Thursday through an official circular. Exporters previously faced liquidity constraints when banks held portions of their advance remittances until shipment completion. This policy change addresses cash flow difficulties experienced by traders operating under tight profit margins.
The revised regulations permit banks to release complete advance payments after proper verification procedures. Exporters must demonstrate valid contracts or letters of credit alongside proven export capabilities. Interest-free advances require shipment execution within twelve months of payment receipt. Authorized dealer banks maintain monitoring responsibilities to prevent transaction misuse while supporting legitimate trade operations.
The revised regulations permit banks to release complete advance payments after proper verification procedures. Exporters must demonstrate valid contracts or letters of credit alongside proven export capabilities. Interest-free advances require shipment execution within twelve months of payment receipt. Authorized dealer banks maintain monitoring responsibilities to prevent transaction misuse while supporting legitimate trade operations.
