Business Report :
Bangladesh Bank (BB) has allowed Offshore Banking Units (OBUs) to extend trade finance to enterprises other than fully foreign-owned ones located specialized zones and also permitted OBUs to enlarge trade finance coverage for enterprises in non-specialized zones.
The central bank issued a circular on Tuesday, modifying the OBU guidelines originally issued on 30 January, to allow greater flexibility in extending trade finance facilities through Authorized Dealer (AD) banks.
In the circular, BB mentioned that OBUs may extend trade finance to enterprises other than fully foreign-owned ones located at specialized zones, arranged through ADs of their own bank, in the form of buyer’s credit, accepted bill financing, and other permissible instruments for the allowable tenure.
Financing arrangements may also be made through ADs of other banks, subject to comprehensive risk assessment, including counterparty exposure and limit evaluation. Such financing shall comply with existing prudential credit norms and due diligence requirements, the circular added.
Under the earlier framework, OBUs were permitted to provide trade finance to enterprises located in specialized and non-specialized zones, arranged through their own bank’s ADs, in the form of buyer’s credit, accepted bill financing, and similar instruments.
Industry insiders have welcomed the move, noting that the expanded framework will enable local exporters and importers to access a wider range of foreign currency financing options, particularly at a time when global trade and liquidity conditions remain dynamic.
The BB also mentioned in the circular that OBUs may extend trade finance to enterprises located at non-specialized zones, arranged through ADs of their own bank, in the form of admissible buyer’s credit, accepted bill financing, and other permissible instruments for the allowable tenure.Â
Financing arrangements may also be made through ADs of other banks, subject to comprehensive risk assessment, including counterparty exposure and limit evaluation. Such financing shall comply with existing prudential credit norms and due diligence requirements, it added.
