Rules eased for banks to facilitate import payments

The Bangladesh Bank today eased rules for banks for settlement of import payments for capital machinery, industrial raw materials and payments for the government imports through funds taken from their offshore banking units (OBS).

To meet import payment obligations, banks would be able to transfer funds from their OBUs to their domestic business or onshore units for up to 40 per cent of their total regulatory capital, the central bank said.

Earlier, the Bangladesh Bank allowed banks to place up to 25 per cent of their regulatory capital to domestic business units from their OBUs so that the lenders could settle import payments.

The benefit was allowed for period until June 30 this year.

Now, the central bank said the latest relaxation shall remain valid until December 31 this year.

A senior official of the BB said some banks have offshore banking units that can source foreign currency from abroad through different ways such as loans.

If they have funds at their offshore banking units, the easing of rules will enable them to place more foreign currency to their domestic business units from OBUs to settle import payments.

This will increase availability of forex at their domestic banking units and allow them to clear import obligation, the official added.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank Ltd, said they urged the central bank for relaxation of settlement of import payments.

"This is a good step. It will help us manage foreign currency liquidity in a more efficient manner," he said.