Guidelines for Foreign Eexchange Transactions-Vol-I

GUIDELINES FOR FOREIGN EEXCHANGE TRANSACTIONS-VOL-I

  1. CHAPTER 2 ARTICLE 6: RELEASING OF FOREIGN CURRENCY NOTES, COINS AND TCS. REF: FEPD CIRCULAR NO. 07 DATED 12.07.2015.
  2. Money Changers may sell foreign currency notes, coins and TCs only to outgoing Bangladesh nationals against their annual private travel entitlements (per calendar year) subject to a maximum limit of USD 1000 or equivalent in the form of cash and /or TC. Release of foreign exchange in excess of USD 200 or equivalent shall require valid visa. Money Changers may also sell foreign currency notes, coins and TCs to outgoing foreign nationals having duly issued encashment certificates, subject to a maximum limit of USD 500 or equivalent by re-conversion of Bangladesh Taka proceeds of foreign exchange sold by a tourist during his/her stay in Bangladesh. Only the Money Changer that issued the encashment certificate can make such re-conversion.

While releasing foreign exchange for travel abroad, Money Changers shall verify and satisfy themselves that the travel for which the foreign exchange released earlier was actually undertaken or the issued foreign exchange was duly encashed. Each sale of foreign exchange shall be recorded in the passport and air ticket (in case of air travel) of the outgoing passenger with seal and signature of authorised person of the Money Changer. For issuance of TC, signature of the buyer should be obtained on the TC as per usual norm. In each case of release of foreign exchange for travel abroad, photcopies of first six pages, pages containing visa (if

available) and pages containing endorsement of foreign exchange of the passport duly signed by the authorised person of the Money Changer with seal shall be retained at least for five years for inspection by Bangladesh Bank Team. In case of release of foreign exchange to a foreign tourist agaist encashment certificate evidencing conversion of foreign currency into Taka, photocopy of the encashment certificate produced by the outgoing tourist shall be retained at least for five yeras alongwith the receipts/vouchers and other records of sale. It may be mentioned here that reconversion of Taka into foreign currency (maximum USD 500 or equivalent) can be done only by the money changer with whom the foreign exchange was encashed earlier.

The Money Changers shall verify to satisfy themselves that the journey is to be undertaken not later than two weeks after the date on which the exchange is issued. In case of air travel the date of departure needs to be determined on the basis of air ticket and an undertaking from the passenger may be treated as the determining criterion for other cases. No exchange should be sold unless the date of departure is specified within the stipulated time.

CHAPTER 2 ARTICLE 7: STOCK OF FOREIGN CURRENCY AND FOREIGN CURRENCY ACCOUNT. REF: FEPD CIRCULAR LETTER NO. 36 DATED 26.12.2013.

The initial stock of foreign currency notes and coins shall be built up by the Money Changers by way of permissible purchases from incoming foreign/Bangladesh nationals in the manner prescribed at para 5 of this section above and sales in the manner prescribed at para 6 of this section. The maximum stock of foreign exchange shall not exceed USD 25000 or equivalent as at the close of each business day. Cash foreign exchange beyond this limit including entire TCs received from incoming passengers shall either be encashed or deposited to the foreign currency account with the designated AD bank of the concerned Money Changer.

The balance of that account must not exceed USD 50,000 or equivalent at any point of time.

CHAPTER 3 ARTICLE 2(A): Payments through ACU. REF: FEPD CIRCULAR NO. 01 DATED 11.01.2016, FEPD CIRCULAR NO. 10 DATED 04.03.2014, FEPD CIRCULAR NO. 19 DATED 05.10.2009.

  1. (a) The central Banks of Bangladesh, India, Iran, Nepal, Pakistan, Sri Lanka, Myanmar and Bhutan have an Agreement to settle current transactions between these countries through the Asian Clearing Union(ACU) mechanism. All such payments to the ACU member countries excepting those covered by loan/credit agreements are accordingly settled through the Asian Clearing Union (ACU) mechanism in “Asian Monetary Units which may be referred to in the abbreviated form as “AMUs”. The Asian Monetary Units shall be denominated as ‘ACU Dollar’ and ‘ACU Euro’ which shall be equivalent in value to one US Dollar and one Euro respectively.

(b) The ACU Agreement referred to above provides for settlement of the following types of payments:

(i) Payments from residents in the territory of one participating country to residents in the territory of another participating country.

(ii) Payments for current international transactions as defined by the Articles of Agreement of the International Monetary Fund.

(iii) Payments permitted by the country in which the payer resides.

(c) ADs shall maintain nostro accounts in AMUs (ACU Dollar, ACU Euro) with their correspondent banks in ACU member countries for the purpose of settlements through ACU. Similarly accounts in AMUs (ACU Dollar and ACU Euro) may be opened by the ADs in their books in the names of their correspondents in ACU member countries. ADs may pay interest on the balance of nostro accounts in AMUs as per mutually agreed terms and conditions with the correspondent(s).

(d) An AD needing to fund its AMU nostro account with a correspondent bank in an ACU member country shall do so through Bangladesh Bank against surrender of the required amount in AMU, or of equivalent taka at Bangladesh Bank’s selling rate.

Bangladesh Bank will advise the central bank of the concerned ACU member country to make the amount available to the transferee bank in that country. After making the payment, the central bank of the recipient ACU member country shall advise the Secretary General of the ACU Secretariat to credit its account by debit to Bangladesh Bank’s account.

(e) For repatriating funds from an AMU nostro account with a correspondent bank in an ACU member country an AD shall advise the correspondent bank to route the payment through the central bank of that country, which will advise Bangladesh Bank to make the amount available to the recipient AD. Bangladesh Bank on receipt of the advice, shall make the fund available to the recipient AD (either in AMU or in equivalent Taka. at BB’s buying rate, at the AD’s option) and shall advise the Secretary General of the ACU Secretariat to credit its account by debit to the account of the central bank of the transferor ACU member country.

CHAPTER 3 ARTICLE 3(C): CLEARING ARRANGEMENT WITH BANGLADESH BANK. REF: FEPD CIRCULAR LETTER NO. 04 DATED 07.03.2016.

Payment against inland back to back LCs in foreign currency shall be settled through Banlgadesh Bank FC clearing accounts of the concerned AD banks.

CHAPTER 3 ARTICLE 5(1(I)): GENERAL. REF: FEPD CIRCULAR NO. 33 DATED 02.09.2014.

Barring a few remittances of special nature, most outward remittances either in its entirety or upto a certain limit set by Bangladesh Bank may be approved by the ADs, following declaration of Taka as convertible for current account payments from March, 1994. However, the limits of release of foreign

exchange set forth in this Guidelines are indicative; all bonafide requests beyond these indicative limits and payment transfer requests for a current international transaction not specifically included in this Guidelines will be accommodated by Bangladesh Bank upon establishing the bonafides of the expenses.

CHAPTER 5 ARTICLE 2: REPORTING FORMS. REF: FEPD CIRCULAR NO. 23 DATED 24.12.2015.

  1. In all cases of purchase of foreign currency, an application must be made to an AD. For payments against imports into Bangladesh, the prescribed application form is form IMP (Appendix 5/11) and for other types of remittances form TM (Appendix 5/5). TM form must be used for reporting by the ADs even when remittance is approved by Bangladesh Bank in any other manner, for instance by issuing a special permission/approval letter. On receipt of the application from the client/customer, the ADs may effect the sale of foreign exchange if they are empowered to approve the application. If the transaction requires prior approval of the Bangladesh Bank, the application should be forwarded by the AD to the Bangladesh Bank for consideration.

CHAPTER 5 ARTICLE 10: INWARD REMITTANCES-NO RESTRICTIONS. REF: FEPD CIRCULAR NO. 13 DATED 21.09.2015.

  1. The ADs may freely purchase foreign currencies or raise debits to non-resident Taka Accounts of the respective bank branches and correspondents. Remittances equivalent to US$ 10000 and above should be reported on Form C (See Appendix 5/6) attached to the appropriate schedule (See Chapter 2, Vol. 2). However, declaration on Form C by the beneficiary is not required against remittances sent by Bangladesh nationals working abroad. The purpose of remittances should be clearly stated on the Form C. Where the country of origin of funds and currency in which remittances received are the same, the ADs may submit a consolidated Form C in respect of those remittances attaching therewith a separate list showing details of remittances comprising the amount reported on Form C. Remittances received against exports should be certified and reported on EXP Forms. In case of remittances, received in advance for exports the ADs should obtain a signed declaration from the beneficiary on the back of the “Advance Receipt Voucher” (See Chapter 2, Vol. 2) certifying the purpose of remittance.

CHAPTER 7 ARTICLE 21 (I) (F): TERMS ON WHICH LCS MAY BE OPENED. REF: FEPD CIRCULAR NO. 04 DATED 19.05.2015, FEPD CIRCULAR NO. 11 DATED 15.10.2012.

LC covering value more than USD 5000 or equivalent should be sent through SWIFT or other similar arrangements to the advising bank;

CHAPTER 7 ARTICLE 23 (B): LCS TO BE OPENED ONLY AGAINST FIRM CONTRACTS & CREDIT REPORT OF THE FOREIGN SUPPLIERS. REF: FEPD CIRCULAR NO. 11 DATED 03.07.2013.

The ADs should also obtain confidential report on the exporters from their branches or correspondents abroad or in their discretion, satisfy themselves as to the standing of the exporter by consulting standard books of reference issued by international credit agencies of international standing such as Seyds, Dunn and Bradstreet in all cases where the amount of the LC/Contract exceeds BDT 5 lac against proforma invoices issued direct by foreign suppliers and BDT 10 lac against indents issued by local agents of the suppliers. Such reports should be obtained by the ADs themselves and the reports if submitted by the importers should not be accepted. The ADs may also, at their discretion and in their own interest, verify the standing of the beneficiaries even in cases where the value of the credit is lower than the limits mentioned above.

Credit report my remain valid for a preiod of maximum twelve months from the date of issuance if no adverse report comes to the notice of the AD. Moreover, credit report of the same supplier collected for one importer may be used for other importers within the same validity.

CHAPTER 7 ARTICLE (I): ADVANCE REMITTANCE AGAINST IMPORTS. REF: FEPD CIRCULAR NO. 04 DATED 22.01.2014.

(i) Advance remittance for permissible imports of goods and services into Bangladesh may be effected by the Authorised Dealers without prior approval of the Bangladesh Bank, against applications from the importers submitted with signed undertaking in the format of Appendix 5/10 provided that:

  1. a) the purchase contract with supplier specifically requires advance payment;
  2. b) the supplier furnishes repayment guarantee acceptable to the Authorised Dealer from a bank abroad, to be invoked for refund of the amount paid in advance in the event of the supplier’s default in delivering the goods or services as per contract. Such guarantee need not however be insisted upon in cases of advance payments up to USD2500 for import of books, journals or life savings medicines.

CHAPTER 7 ARTICLE 33(a): LCS ON DEFERRED PAYMENT BASIS. REF: FEPD CIRCULAR NO. 37 DATED 11.11.2014, FEPD CIRCULAR NO. 02 DATED 06.02.2012.

Subject to compliance with other conditions laid down in this chapter and in the current IPO, import LCs may be opened on deferred payment/usance basis in the following cases:

  1. i) Import of capital machinery on upto 360 days usance basis;
  2. ii) Industrial raw material imports for own use of industrial importers (including back to back imports discussed in detail in the next section) on upto 180 days usance basis;

iii) Import of coastal vessels including oil tankers and ocean going vessels including those procured for scrapping on upto 360 days usance basis;

  1. iv) Import of agricultural implements and chemical fertilizers on upto 180 days basis;
  2. v) Import of life saving drugs (certified/declared as such by Drugs Administration Authority) on upto 90 days usance basis.

For such deferred payment imports, the prices must be internationally competitive and usance interest, if any, should not be at rate higher than the LIBOR for the relative period or the equivalent rate prevailing in the currency of the country of the supplier.

CHAPTER 7 ARTICLE 37: BTB IMPORT LC AGAINST INLAND BTB LC . REF: FEPD CIRCULAR LETTER NO. 1693 DATED 12.12.2010.

Inland back to back LCs denominated in foreign exchange may be opened in favour of local manufacturer-cum- suppliers of inputs, against master export LCs received by export oriented manufacturing units operating under the bonded warehouse system, upto value limits applicable as per prescribed value addition requirement/utilisation permit. However, EXP/IMP form will not be applicable in such cases unless EPZ unit is associated.

Back to back LC may in turn be opened for import of necessary inputs, against inland back to back LC in favour of a local manufacturer- cum- supplier operating under the bonded warehouse system, in accordance with the instructions, mutatis mutandis, at

para 35 & 36 above.

CHAPTER 7 ARTICLE 37: PAYMENT SETTLEMENT AGAINST BTB LCS . REF: FEPD CIRCULAR LETTER NO. 27 DATED 10.12.2012.

  1. Payment abroad in settlement of usance bill against the back to back import LCs shall be made at maturity, out of proceeds of the relative export repatriated in foreign exchange; the required foreign exchange will be set aside, out of the export proceeds, in a separate foreign currency account in the subsidiary ledger of the AD. Before making remittance against the back-to-back import bill, the AD should see that the authenticated copy of bill of entry for bond in evidence of actual arrival of the relative imports has been submitted.

Usance bills against back to back import LCs should be settled at maturity even where for some reason export has not taken place, or where the export proceeds have not been realised, or where the realised export proceeds net of value addition requirement is not adequate to cover the back to back import payment. In such cases post facto approval of Bangladesh Bank (Foreign Exchange Operation Department) will have to be sought for, explaining fully the circumstances of export failure or non-realisation/short realization of export proceeds, with relevant supporting documents. Cases of failure of export against the relative master LCs should also be reported to the National Board of Revenue (NBR) and the concerned Commissioner of Customs so that they may monitor closely the level of stock of the relative goods in the bonded warehouse. A copy of the letter to NBR reporting the export failure should be submitted to Bangladesh Bank alongwith the application for post facto approval of remittance towards back-to-back import payment. Also, all applications for post facto approval of such remittance in the event of export failure and short realisation/non-realisation of export proceeds should be accompanied by the authenticated copy of the relative bill of entry evidencing actual receipt of the back to back imports.

The AD should maintain effective watch on the stock of inputs procured under the back to back arrangement and of finished products made therewith; any indication of illegal disposal of stocks from the bond coming to the knowledge of the AD should immediately be reported to the concerned commissioner of customs and NBR.

CHAPTER 7 ARTICLE 39(i): RETENTION OF FOREIGN CURRENCY IN SINGLE POOL FOR BACK TO BACK IMPORT PAYMENTS UNDER BONDED WAREHOUSE SYSTEM . REF: FEPD CIRCULAR LETTER NO. 01 DATED 27.01.2014.

On encashment of export proceeds equivalent to the portion of value addition, residual portion of export proceeds against different export bills of the same export unit operating under bonded warehouse system may be maintained in foreign currency in a single pool by the ADs . Funds from this pool may be used for different back to back import payments of the same exporting unit on maturity basis to keep minimum involvement of AD’s own fund under the exchange position as well as to keep exporter free from debt burden.

CHAPTER 8 ARTICLE 10(I): DISPOSAL OF EXP FORMS. REF: FEPD CIRCULAR LETTER NO. 01 DATED 27.01.2014.

  1. (i) The EXP Forms are in quadruplicate. In all cases the forms will be completed and signed by the exporter or his authorized agent.

CHAPTER 8 ARTICLE 10(I): EXPORT PROCEED REALIZATION CERTIFICATE AGAINST DIRECT AND DEEMED EXPORTS . REF: FEPD CIRCULAR NO. 04 DATED 19.05.2009.

  1. Sometimes exporters are required to submit evidences of export and relaisation of export proceeds to various government agencies against direct and deemed exports. In such cases, ADs may issue Proceed Realisation Certificate ( PRC) against direct and deemed export (as the case may be) after being confirmed about the realisation of such proceeds. ADs shall use separate proforma for issuance of direct export PRCs and deemed export PRCs.

ADs shall follow the instructions in case of issuance of PRCs as under:-

  1. a) ADs shall use prescribed proforma in Appendix 5/23 to issue PRCs for proceeds realised against direct exports while prescribed proforma in Appendix 5/23(A) shall be used to issue PRCs for proceeds realised against deemed exports.
  2. b) ADs shall issue original PRC for the requiring government authority as usual while another copy stamped/typed in bold ‘Verification Copy’ at the top of the prescribed proforma is to be issued for onward submission to the concerned Area Office of Bangladesh Bank.
  3. c) In case of issuance of PRC against deemed exports, ADs are required to submit additional information such as beneficiary’s name, bill reference, paying bank branch’s name, realised amount, date of realisation etc. with the monthly Returns in support of the transactions to be reported as per Para 13(a), Chapter 2 of the GFET (Vol-2).
  4. d) ADs shall submit monthly statement embodying a list of issued PRCs with corresponding reporting reference enclosing ‘Verification Copy’ of PRCs and copy of relevant schedules and additional information as mentioned in above para for post facto checking/verification to the Area Offices of Bangladesh Bank by 15th of the following month. A ‘Verification Copy’ has to be preserved by the ADs for eventual inspection by Bangladesh Bank inspection team and for verification by other government agencies.
  5. e) Head Office/Principal Branch of the AD shall send updated list of its officials along with their specimen signatures, PA nos. and phone numbers who are authorised to sign PRCs to the Offices of the ‘Bond Commissionarate’ and ‘Duty Exemption and Drawback Office (DEDO)’ from time to time for verifying the genuineness of issued PRCs.

ADs are advised to exercise utmost caution in issuing PRCs to avoid any possible misuse. Any irregularity shall be treated as violation of Bangladesh Bank’s instructions. ADs are also advised to extend their full co-operation to different government agencies regarding verification of any PRC, if approached. However, ADs shall start issuance of PRCs under the above arrangements for proceeds realised from 1st July, 2009 onwards.

CHAPTER 8 ARTICLE 23(b): NIL. REF: FEPD CIRCULAR NO. 06 DATED 30.05.2011.

EXP procedure will not be applicable for export undertaken in non-physical form such as V-Sat, Internet or other electronic media. Each sales contract for such export will clearly include the name & address of the foreign buyer, description of the software or data entry/processing services, quantitative description, realizable value and time for receiving the value. Executed export contract will have to be submitted to the Authorised Dealer. Authorised Dealer will maintain a register bearing the title’ “Register for export of software and data processing/entry through electronic media” to record the above information in each case as per form prescribed in Appendix 5/24. As per term of export contract, bill, invoices etc. against such export(s) will be sent through the AD to the foreign buyer for realisation of export proceeds and value will be received through the AD. Declaration in Form – ‘C’ shall have to be made for each receipt of export proceeds from such export including any advance receipt to that effect. The AD will record each receipt of export proceeds in the above mentioned register.

CHAPTER 8 ARTICLE 27: SALE OF BANGLADESHI GOODS TO EPZ ENTERPRISES. REF: FEPD CIRCULAR NO. 01 DATED 05.02.2015.

  1. Sales of Bangladeshi goods or raw materials to the enterprises in EPZ against payment in foreign currency shall be treated as exports from Bangladesh and normal foreign exchange regulations concerning declaration of exports on EXP Forms and repatriation of proceeds is applicable to these exports to the EPZ enterprises.

CHAPTER 9 ARTICLE 3(B): SHARES OF THE PUBLIC LIMITED COMPANIES NOT LISTED WITH STOCK EXCHANGE AND PRIVATE LIMITED COMPANIES. REF: FEPD CIRCULAR NO. 32 DATED 31.08.2014.

Prior approval of Bangladesh bank is required for repatriation of sales proceeds of non-residents equity investment in the: (1) public limited companies that are not listed with the stock exchange companies; and (2) private limited companies. There being no established market price for such investment, Bangladesh Bank, while determining the remittable amount, works out the net asset value of the shares on the basis of audited financial statements as on the date of sales and net asset value thus calculated above is considered repatriable. If net asset value so calculated exceeds the face value of the share of the company concerned, capital gain derived therefrom may also be repatriated. However, only the net asset value shall be considered as repatriable/or for re-investment in Bangladesh even if the declared sale value exceeds the net asset value. Prior permission of Bangladesh Bank is not required for sales/transfer of shares of public limited companies not listed with the stock exchange companies by one non-resident to another nonresident.

CHAPTER 10 ARTICLE 2: NIL. REF: FEOD CIRCULAR LETTER NO. 01 DATED 01.08.2011.

Remittance of surplus earnings of foreign airlines, shipping companies and courier services companies Apart from the periodical statements referred to in the foregoing paragraph, applications for remittance of surplus earnings of foreign airlines and shipping companies (in TM form, with declaration as per Appendix 5/5) submitted to the ADs should be accompanied by the following documents:

(B) Shipping Companies

(i) Encashment certificate in support of remittance from abroad by head office/principal;

(ii) Import/export freight manifests and bills of lading mentioned in the manifests;

(iii) In the case of arrival in Bangladesh ports of vessel chartered by the foreign principal of Bangladeshi shipping agent, attested copy of the relevant charter party;

(iv) In the case of export cargo, statement regarding tax liability in prescribed form (Appendix 5/45) duly signed by the taxation and customs authorities. The shipping company/its agent shall prepare this statement in quadruplicate and submit it to the tax authorities. The concerned Deputy Commissioner of Taxes will put his signature and seal on those and return three copies to the concerned shipping company or his agent. The shipping company/agent will submit those 3 (three) copies to the concerned office of the customs authorities who will put there signatures and seal alongwith name and full address on those and return two copies to the shipping company/agent who will submit these to the AD. The authorised officer of the AD will put his signature and seal mentioning name and address on both copies, retain one copy and return the other to the shipping company/agent;

(v) Forms as per para 1 (vi) above and declarations as per para 1

(viii)(a) and para 1 (viii)(b) above;

  1. vi) Bill/voucher in support of expenses shown in Form Shipping IV (App. 5/37) for all expenses of Tk. 2500/00 or more per item.

Each form, statement and supporting bills/vouchers shall be submitted to the AD in duplicate.

Examination and Processing by Authorised Dealer:

In determining total income, freight received against export on CFR/CIF/CPT/CIP basis, freight received against import on FOB basis and fund received by way of inward remittance from head office/principal of local shipping agent are to be added. The surplus earning is to be determined by deducting expenses shown in Form Shipping IV from the total income. Expenses relating to port charges and custom charges as per disbursement statement (Form Shipping IV) are to be checked with the bills issued by the concerned port authority. The ADs shall satisfy themselves that freight brokerages have been reflected in Form Shipping IV.

In the case of export of non-jute and non-traditional goods (including export of jute yarn and jute carpet by private sector jute mills and jute carpet manufacturers) 0.50% of total income is payable to Bangladesh Shippers’ Council as freight brokerage on account of service charge. This freight brokerage is also required to be shown in the disbursement statement as an expense. The AD shall also ensure that agency fees and commission as per para 1 (iv) above have been shown at serial no 8 of the Disbursement Statement. Taxes shown in Disbursement Statement should be checked with particulars furnished for determination of tax liability as per Appendix 5/45. Since income tax on account of Feeder Freight is not shown in the Appendix referred to above, remittance of surplus earnings may be allowed only on receipt of supporting document to the effect that income tax has been paid on this account. Any advance payment made to the Master of the ship, payment towards bunker supply, expenses incurred in connection with hotel bill or charter hire should also be shown separately in the Disbursement Statement. For each item of expense amounting to Tk. 2500/00 and above, the relevant bills should be checked. In each case of remittance of surplus earnings, the ADs should obtain a certificate from the Shipping Company/Agent that all the expenses have been shown in the disbursement statement, and that omission of any expense from the said statement shall render the applicant liable for action against violation of Foreign Exchange Regulations. The AD shall approve the TM Form for the amount of surplus earnings found in order and after effecting remittance forward one full set of the papers alongwith approved TM Form to the concerned area office of the Bangladesh Bank within 15 days of the following month of such remittance for post facto examination.

CHAPTER 10 ARTICLE 27: REMITTANCE OF COST OF TRAINING AND CONSULTANCY SERVICES. REF: FEPD CIRCULAR NO. 08 DATED 18.02.2014.

Industrial enterprises producing for local markets may remit through their nominated ADs upto 1% of annual sales as declared in their previous years’ income tax return towards costs of training and consultancy services as per relevant contract with the foreign trainer/consultant, and prior approval of Bangladesh Bank will not be required for such remittances. In this connection industrial enterprises will mean firms and companies engaged in manufacturing or processing or assembling.

CHAPTER 10 ARTICLE 33: ADVERTISEMENT OF BANGLADESHI PRODUCTS IN MASS MEDIA ABROAD. REF: FEPD CIRCULAR LETTER NO. 20 DATED 08.09.2015.

ADs may without prior Bangladesh Bank approval effect remittance towards cost of advertisement of Bangladeshi products in mass media abroad. Remittance applications from the companies/firms in Bangladesh should be supported by the invoice from the foreign mass media concerned, and the applicant will have to submit copy of the advertisement within one month of its issuance. The AD shall preserve the invoice, application and advertisement copy for post facto checking by inspection officials of Bangladesh Bank.

CHAPTER 11 ARTICLE 8(A): FAMILY REMITTANCE FACILITY. REF: FEPD CIRCULAR NO. 06 DATED 15.04.2013.

Foreign nationals who are resident in Bangladesh and who have an income in Bangladesh are permitted to make monthly remittances to the country of their domicile out of their current savings up to 50% of their net income to cover their commitments abroad.

(b) This remittance facility is not available to foreign born wives of Bangladesh nationals.

(c) The AD bank branch that receives the pay checks from the employer for credit of the personal account of the foreign national shall process and approve such remittance applications submitted as per Appendix 5/63 along with TM Form and attested copy of the employment contract duly approved by the BOI or other relevant Govt. authority (renewed/ revalidated up to date, where needed).

(d) Salary on which remittance entitlement is calculated would exclude monetary value of various facilities, such as, free house, transport, servants, boarding etc., as also cash payments towards conveyance, entertainment, house rent etc. The term ‘net income’ would in this context signify gross income of the applicant less all compulsory deductions such as, income tax, provident fund and pension fund, house rent and other deductions which are of a fixed nature. Bonus or commission receivable by foreign nationals cannot be added for calculating monthly entitlement in anticipation of the grant of bonus or commission, the inclusion will be made only after the net amount of bonus or commission has been actually paid by the employers and will be spread over the subsequent twelve months.

(e) Net salary (as calculated in terms of the preceding para) of the foreign nationals payable for the period of leave admissible to them as per their service contract duly approved by the Govt. will be remittable. In Such cases a declaration from the employer to be obtained to the effect that leave for which remittance is claimed has been earned exclusively on service tendered in Bangladesh. Such remittance should be effected on approach by the employer. The employer should also be advised that the remittance for the remaining period will not be admissible should the employee return to Bangladesh earlier than the period for which it was intended for.

Family remittance facility will not be admissible for the period for which leave salary will be availed of.

(f) Foreign exchange may be released for short travels abroad during approved employment period of the foreign national and his/ her spouse and other family members; amounts so released should be adjusted from the monthly remittance entitlement, or from the leave salary remittable as per sub-para (e) above. Such release of foreign exchange would be against tickets evidencing confirmed date of travel within two weeks from the date of issuance of foreign exchange in TCs.

(g) Remittances effected in accordance with the above instructions will be reported to the Bangladesh Bank in the usual monthly returns of the ADs. The ADs shall maintain full records of such remittances, for eventual examination by inspection officials of Bangladesh Bank as also for reference while processing applications for remittance of savings on retirement from Bangladesh.

CHAPTER 11 ARTICLE 9: MEMBERSHIP FEES, FEES FOR APPLICATION, REGISTRATION, ADMISSION, EXAMINATION, ETC. REF: FEPD CIRCULAR NO. 03 DATED 20.01.2014, FEPD CIRCULAR NO. 16 DATED 04.10.2015, FEPD CIRCULAR NO. 23 DATED 02.06.2014, FEPD CIRCULAR NO. 11 DATED 14.07.2011.

The ADs may release foreign exchange towards remittance of membership fees of foreign professional and scientific institutions.

They are also allowed to remit fees for application, registration, admission, examination (TOEFL, SAT etc.) in connection with admission into foreign educational institutions on the basis of written application or demand notice/letter from the concerned foreign institution showing the amount to be remitted. The draft/TT etc. to be issued for such remittances should be payable direct to the Institution concerned and the transaction should be reported to the Bangladesh Bank supported by Form TM in the usual monthly return.

CHAPTER 11 ARTICLE 10: RELEASE OF FOREIGN EXCHANGE FOR STUDY ABROAD. REF: FEPD CIRCULAR NO. 14 DATED 28.09.2015, FEPD CIRCULAR NO. 21 DATED 28.05.2014, FEPD CIRCULAR NO. 10 DATED 03.08.2009.

Prior approval of Bangladesh Bank is required to release foreign exchange for study of Bangladeshi students abroad at school level. However, ADs are allowed to release foreign exchange for admission and study by Bangladesh nationals in regular courses such as undergraduate, post graduate, language course pre-requisite to bachelor degree & professional diploma/certificate courses in recognised institutions abroad subject to verification of bonafides according to the following drill:

(A) Application and required papers

(i) Application (Appendix 5/64) duly filled in;

(ii) Original and photocopy of admission letter issued by the educational institution in favour of the student (such as the I-20 in the case of US institutions);

(iii) Original and photocopy of estimate relating to annual tuition fee, board and lodging, incidental expenses etc. issued by the concerned educational institution (I-20 in case of US institutions);

(iv) Attested copies of educational certificates of the applicant; and

(v) Valid Passport.

(B) Examination and processing by AD

(a) After scrutinising the application and the supporting documents submitted, the AD shall issue foreign exchange as per estimate furnished by the educational institution subject to adjustment with travel entitlement. On application from the concerned student, expenses in transit not exceeding US dollar 200 or its equivalent in other freely convertible currency may be allowed out of travel entitlement described in para 1 of chapter 12 of this Guidelines.

(b) In each case of sale of foreign exchange, the front page of the original letter of estimate/acceptance letter issued by the concerned educational institute should bear clearly the round stamp of the foreign exchange issuing bank branch and also the signature of the officer of the said branch.

(c) After verifying the original copies of papers referred to in para (A) above, the foreign exchange issuing ADs would attest the photocopy thereof and preserve the same. Thereafter, the original copies would be returned to the applicant.

(d) Foreign exchange payable to the educational institution should be issued in favour of the institution concerned in the form of TT/MT/Draft. If payment on account of board and lodging/incidental expenses etc. are not required compulsorily to be in favour of the educational institution, foreign exchange on these counts may be issued in favour of the student in the form of TC/Draft etc. Educational institutions sometimes require applicants to send advance amounts for processing of applications, retention of seats etc. If the papers of the foreign educational institution clearly state such requirement, advance remittance may be effected.

(e) The facility of purchase of foreign exchange/remittance will not be admissible for more than one academic year at a time.

(f) For each release of foreign exchange subsequent to the first release, the current progress report and current estimate of the educational institution should be taken into consideration. The ADs shall maintain separate file for each student with all relevant papers in readiness for perusal by inspecting officials of Bangladesh Bank.

(g) All purchases of foreign exchange throughout the entire duration of a course of study pursued abroad should be from one AD bank branch. For any intended change in this respect, the relevant file shall be transferred direct to the concerned new AD branch on written request by the student. Under no circumstance should the file be handed over to the student.

CHAPTER 11 ARTICLE 14: REGISTRATION/PARTICIPATION FEE FOR ATTENDING TRAINING. SEMINAR, WORKSHOP ABROAD. REF: FEPD CIRCULAR NO. 10 DATED 03.08.2009.

ADs may release registration/participation fee of the Officials of Govt., Autonomous/Semi-autonomous institutions etc., employees of banks and financial institutions operating in Bangladesh, Faculty Members of nationally recongnised banking training institutions for attending training/seminar/workshop abroad in the form of FTT/FDD only favouring organising institutions abroad on the basis of the invitation letter received in the names of the applicants or their employer institutions. Before releasing foreign exchange for the said purpose, ADs shall have to obtain letter from the concerned ministry/department/competent authority authorising the officals/employees/faculties to attend the programme abroad with a request to release foreign exchange as participation/registration fees. Remittance for the above purpose shall have to be repored with TM Form. ADs are also advised to collect and retain copies of completion certifiate, travel documents from the applicant upon return to Bangladesh for eventual inspection by the Bangladesh Bank.

CHAPTER 12 ARTICLE 1(I): RELEASE OF FOREIGN EXCHANGE: ENDORSEMENT ON PASSPORT AND TICKET. REF: FEPD CIRCULAR NO. 16 DATED 16.05.2016, FEPD CIRCULAR NO. 02 DATED 11.02.2015.

The amount of foreign exchange released by an AD to a traveller with the approval of the Bangladesh Bank or under general authority given to the ADs by Bangladesh Bank should be recorded by them on the traveler’s valid passport as well as ticket under their stamp and signature at the time of release of such exchange. Release of foreign exchange in excess of USD 200 or equivalent will require valid visa. However, while issuing foreign exchange to the Diplomats/Privileged persons/UN personnel, Govt. officials travelling on official duties, such endorsement in their passports need not be made. The AD should verify to satisfy itself that the ticket covers a journey to be undertaken not later than two weeks after the date on which exchange is issued. No exchange should be sold against tickets, which do not specify the date of departure.

CHAPTER 12 ARTICLE 1(II): RELEASE OF FOREIGN EXCHANGE FOR TRAVEL ABROAD. REF: FEPD CIRCULAR NO. 17 DATED 06.04.2014, FEPD CIRCULAR NO. 24 DATED 24.11.2010, FEPD CIRCULAR NO. 02 DATED 11.02.2015.

The ADs may release foreign exchange upto US$ 1000 or equivalent per person during a calendar year to Bangladesh nationals proceeding by air to destinations in SAARC member countries and Myanmar; within this annual limit, upto US$ 500 or equivalent may be issued per person for overland travels to the aforesaid countries. Also for visits of Bangladesh nationals to destinations in countries other than those mentioned above, upto US$ 3000 per person may be issued during a calendar year.

However, foreign exchange in the form of cash must not exceed US$ 2000 at any one instance. For resident Bangladesh nationals proceeding abroad against one way ticket for valid job or migrating abroad, the release of foreign exchange shall not exceed the half of the un-used balance of the annual travel entitlement of the person concerned in the calendar year. Irrespective of foreign exchange entitlement, the outgoing passenger is permitted to take upto Bangladesh Taka 500 in cash at each time.

The above limits are indicative. Bangladesh Bank will authorize release of foreign exchange for travel abroad beyond these indicative limits upon submission of documents regarding the bonafides of the expenses. Application for such authorization should be sent to Foreign Exchange Operation Department of Bangladesh Bank.

CHAPTER 12 ARTICLE 1(VII): RELEASE OF FOREIGN EXCHANGE:. REF: FEPD CIRCULAR NO. 07 DATED 12.07.2015, FEPD CIRCULAR NO. 02 DATED 11.02.2015.

In each case of release of foreign exchange for travel abroad, photocopies of first six pages, page bearing visa on the passport (if available), the page recording endorsement of foreign exchange and photocopies of the pages of ticket showing name of the passenger, route and date of journey and endorsement of foreign exchange alongwith the relative TM Form should be sent to Bangladesh Bank alongwith report of the transaction in the usual monthly returns.

CHAPTER 12 ARTICLE 1(III): NIL. REF: FEPD CIRCULAR NO. 02 DATED 11.02.2015.

(iii) The annual quotas mentioned above are for adult passengers.

For minors (below 12 years in age) the applicable quota will be half the amount allowable to adults.

(iv) While releasing foreign exchange for travel abroad, the AD should verify and satisfy itself that any foreign exchange released for an earlier travel was utilised with the journey being actually undertaken or was duly encashed unutilised.

(v) The travel entitlements mentioned above may be utilised also by way of international cards issued in the names of the persons concerned. Instructions relating to the issue and use of such cards are laid down at Chapter 19.

(vi) While releasing foreign exchange for travel purposes the ADs should ensure that:

(a) the intending traveller is a client of the AD bank or is sufficiently well known to the AD bank for it to be satisfied about the bonafide of the application;

(b) the intending traveller is in possession of a confirmed air ticket (where applicable) for journey to be undertaken;

(c) the amount released is endorsed on the passport and air ticket (where applicable) of the traveller with indelible ink, with the signature and name of the AD branch embossed in the passport and ticket (where applicable);

CHAPTER 12 ARTICLE 3: OFFICIAL OR SEMI-OFFICIAL VISITS BY EMPLOYEES OF GOVERNMENT/ AUTONOMOUS / SEMI-AUTONOMOUS BODIES. REF: FEPD CIRCULAR NO. 16 DATED 16.05.2016.

For official or semi-official visits abroad by the officials of Government/Autonomous/Semi-autonomous institutions etc., Ads may release foreign exchange as per entitlements fixed by the Ministry of Finance/respective competent authority from time to time. In such cases, the applicant for foreign exchange shall be required to submit the Competent Authority’s Order/Notification/Circular authorising the travel abroad.

CHAPTER 12 ARTICLE 6: ISSUE OF TCS AND FOREIGN CURRENCY NOTES TO FOREIGN NATIONALS. REF: FEPD CIRCULAR NO. 02 DATED 11.02.2015.

The ADs may issue foreign currency TCs to foreign nationals without any limit and foreign currency notes upto USD 2000 per person against surrender of equivalent amounts in foreign currencies. The TCs and foreign currency notes should, however,  be delivered only on production of a ticket for a destination outside Bangladesh and the amount issued should be endorsed on the relative passports. In case of travel by car, the ADs may accept export-cum-import permits in lieu of tickets.

CHAPTER 12 ARTICLE 7(I): BUSINESS TRAVEL ENTITLEMENT FOR NEW EXPORTERS. REF: FEPD CIRCULAR NO. 11 DATED 10.03.2014.

Upto US$ 6000 or equivalent may be issued by an AD to a new exporter for business travel abroad, against recommendation letter from Export Promotion Bureau(EPB). Genuine requirements for higher amounts will be considered by Bangladesh Bank on applications submitted through ADs with supporting documents.

CHAPTER 12 ARTICLE 7(II): BUSINESS TRAVEL ENTITLEMENT FOR IMPORTERS AND NONEXPORTING PRODUCERS. REF: FEPD CIRCULAR NO. 11 DATED 10.03.2014.

Importers are entitled to a business travel quota @ 1% of their imports settled during the previous financial year while non-exporting producers for the local market are entitled to such business travel quota @ 1% of their turnover of the preceding financial year as declared in their tax return; subject in both cases to annual upper ceiling of US$ 5000. The same business organisation engaged in imports as well as production shall be allowed such business travel quota entitlement only on one count. Bangladesh Bank will grant release of foreign exchange for travel abroad beyond the above mentioned indicative limit upon submission of documentary proof of the expenses. Application for such release should be sent to Foreign Exchange Operation Department of Bangladesh Bank.

CHAPTER 13 ARTICLE 15: NIL. REF: FEPD CIRCULAR LETTER NO. 10 DATED 27.05.2014.

Eligible Bangladesh nationals may send application (as per Appendix 5/69) alongwith a set of specimen signatures of the opener of the account to an AD in Bangladesh duly verified by Bangladesh Mission abroad, or a reputable bank or any other person known to the AD in Bangladesh. The application forms may be had from Bangladesh Missions abroad and from the ADs in Bangladesh or their branches abroad. No set of specimen signatures will be required to be enclosed with the application form if the application is submitted to an AD with whom the applicant has already been holding a foreign currency account. In such case a reference to the respective FC account number will serve as self-introduction and the account opening branch will verify the signature with the specimen signature maintained for the FC account.

CHAPTER 13 ARTICLE 20: Utilisation. REF: FEPD CIRCULAR NO. 25 DATED 22.12.2009.

The ADs may utilise 50% of the balances of NFCD accounts for (i) discounting of usance export bills of Type A and Type B units of EPZs and (ii) payment of back to back LC opened on sight basis. Amounts so utilised should immediately be replenished on realisation of respective export proceeds.

CHAPTER 13 ARTICLE 28(a): NIL. REF: FEPD CIRCULAR NO. 05 DATED 27.05.2015.

Merchandise exporters are entitled to a foreign exchange retention quota of 50% of repatriated FOB value of their exports.

However, for exports of goods having high import content (low domestic value-added) like POL products including naphtha, furnace oil and bitumen, readymade garments made of imported fabrics, electronic goods etc. the retention quota is 10% of the repatriated FOB value.

(b) Retention quota account may also be opened and maintained in the names of deemed exporters for supplying inputs against inland back to back letter of credit denominated in foreign currency. Since foreign exchange earned from direct export is to be shared among direct and deemed exporters, ADs are obliged for the meticulous compliance of the followings:

(i) the total amount credited to the direct exporter’s retention quota account together with foreign exchange paid to the deemed exporter against supply of input must not exceed the net repatriated FOB export value of the direct exporter; and

(ii) the foreign exchange shall be credited to the retention quota account of the deemed exporter only after settlement of the amount against back-to-back LC for deemed export.

(c) Exporters of computer software and data entry/processing services may retain 50% of export earnings repatriated in foreign exchange in ERQ accounts.

(d) Service exporters other than those mentioned at para ‘c’ above may retain 5% of their repatriated earnings in ERQ accounts.

However, foreign exchange earnings on account of indenting commission or agency commission for export from Bangladesh cannot be credited to such accounts since these incomes originate from Bangladesh sources.

CHAPTER 13 ARTICLE 29(I): ELIGIBLE CURRENCY AND UTILISATION. REF: FEPD CIRCULAR NO. 15 DATED 02.09.2010.

Foreign exchange out of the retention quota may be maintained in FC accounts with the concerned ADs in US Dollar, Pound Sterling, Euro or Japanese Yen upon realisation of the export proceeds. Balances in these accounts may be used by the exporters for bonafide business purposes, such as business visits abroad, participation in export fairs and seminars, establishment and maintenance of offices abroad, import of raw materials, machineries and spares etc. without prior approval of Bangladesh Bank. It should be noted that since exporters will use foreign exchange from the retention quota for business visits abroad, no separate business travel quota will be admissible (other than for new exporters as per para 7(i), chapter 12). Foreign exchange from the exporter’s retention quota cannot be used for investment abroad by the exporter.

CHAPTER 14 ARTICLE 7: CHANGE OF RESIDENCE. REF: FEPD CIRCULAR NO. 38 DATED 07.12.2014.

It is provided in Section 20 (l)(a) of the FER Act that any person who has been resident in Bangladesh shall be treated as still resident in Bangladesh until the Bangladesh Bank by general or special order directs otherwise. All nationals of Bangladesh who go out of Bangladesh for any purpose viz. employment, study, business tour, pleasure trip etc. are required to be treated as nonresident for the purpose of Section 5 of the Act, for so long as they remain outside Bangladesh except in the case of accounts of persons holding office in the Service of Bangladesh who go abroad or who are already abroad and residing outside Bangladesh for the time being either on duty or on leave. Such persons will not, therefore, be able to instruct persons in Bangladesh to make any payment on their behalf to persons in Bangladesh. Such payments, if made, will constitute an offence under the FER Act, and will be punishable under the provisions of the said Act. If persons proceeding abroad find that they have to make certain payments to a person in Bangladesh, they must obtain prior approval of the Bangladesh Bank before doing so.

However, when such persons come to Bangladesh on temporary visits their accounts may be treated as “Resident” during the period of their stay in Bangladesh. The ADs will, however, ensure that such accounts are immediately redesignated as “Non-resident” after the accountholders leave the country.

It would, however, be in order for the ADs to raise debits and credits to the accounts of such persons during their absence from Bangladesh for the following:

(a) Debits:

(i) Payments on account of insurance premium, club bills or other payments in Bangladesh of a regular nature for which the ADs hold standing instructions from their customers provided the payments are supported by bills and vouchers.

(ii) Government and Municipal dues in Bangladesh provided payments are supported by official claims.

(iii) Debits representing payments in Bangladesh for cost of passages by air or by sea.

(iv) Other payments by cheques drawn in favour of payees resident in Bangladesh.

(v) Debits on account of purchase of shares of public limited companies and/or securities of the Government of the People’s Republic of Bangladesh provided such shares/securities are purchased and retained by the ADs themselves for and on behalf of the account holder so long as he resides outside Bangladesh. In case the shares/securities are required to be disposed of, the sale proceeds should be credited to the non-resident account.

(vi) Debits on account of disbursements in Bangladesh to resident Bangladesh nationals to the extent of funds received from abroad through banking channel.

(vii) Debits on account of repayments of instalments of loan direct to a financial institution in Bangladesh from which the account holder had obtained loan.

(viii) Debits in reversal of previous credits.

*(i) subsistence expenses of individual account holders and their family member in their country of residence,

(ii) current payments abroad by institutional account holders for permissible procurement of goods and services from abroad;

(iii) all cases at (i) and (ii) above will remain subject to approval/reporting requirements in form A-7 described in paragraph 13 ibid.

(b) Credits:

(i) Receipts on account of salary, allowances, bonus, commission etc.,

(ii) Dividend and interest income on investments in shares and securities,

(iii) Income from landed property and agricultural rent,

(iv) House rent and sale proceeds of properties on the basis of documentary evidence,

(v) Interest accrued on the amounts lying in the non-resident accounts, (vi) Sale proceeds of shares of public limited companies and/or securities of the Government of the People’s Republic of Bangladesh purchased under Sub-para (v) of para (2) (a) above,

(vii) Remittances received from abroad through banking channel,

(viii) Refund of amount previously debited or over-charged.

In these cases, the AD must satisfy himself that the credit falls under any one of the exempted categories and represents the purpose which it purports to do before passing it through the account.

When a person domiciled in Bangladesh leaves Bangladesh to take up permanent residence in another country his account should be treated as an account of the country of his new domicile; similarly, when a foreign national residing in Bangladesh leaves Bangladesh permanently, his account should be treated as an account of the

country of his permanent domicile.

CHAPTER 14 ARTICLE 9: ACCOUNTS OF FOREIGN NATIONALS RESIDENT IN BANGLADESH: FORM QA 22. REF: FEPD CIRCULAR NO. 15 DATED 24.03.2014.

The accounts of all foreign nationals who are resident in Bangladesh and the accounts of companies or firms (other than banks) whose head office or controlling interests are outside Bangladesh but are operated on by persons in Bangladesh may be treated as resident accounts. The account-holders or persons in Bangladesh authorised to operate on such accounts must sign Form QA-22 (See Appendix 5/72). Form QA-22 should be obtained by the ADs in duplicate and a copy thereof forwarded to the Bangladesh Bank for record as and when the account is opened.

Prior approval of the Bangladesh Bank for opening such accounts is, however, not necessary. This form is an undertaking that the signatory will not provide any foreign currency against reimbursement in Taka and that any transaction on the account not directly connected with the signatory’s business in Bangladesh or which represents remittance from abroad will be reported to the Bangladesh Bank on Form A-7 (Appendix 5/73). Declaration on Form QA-22 need not be taken from members of foreign embassies, legations, consulates and foreign government officials in Bangladesh. Permission has also been given to banks which are not ADs to open taka accounts of foreign nationals in their books subject to their signing certificates on Form QA-22.

CHAPTER 15 ARTICLE 1: BORROWING ABROAD BY PRIVATE SECTOR INDUSTRIAL ENTERPRISES. REF: FEID CIRCULAR LETTER NO. 03 DATED 06.05.2014, FEPD CIRCULAR NO. 13 DATED 12.03.2014.

All proposals for borrowing from abroad by private sector industrial enterprises in Bangladesh (including supplier’s credits, financial loans from institutions or individuals and debt issues in capital markets abroad) shall require prior authorisation of the Board of Investment (BOI). Procedures in details for obtaining such credit facilities have been embodied in the Notification No. BOI/R&IM1/4(39)/81(Part)/1209 of Board of Investment (BOI) issued on 10th December, 1998 ( Appendix 6/1).

Applications as per proforma at the Annexure-A of Appendix 6/1 for approval of proposals for borrowing from abroad should be submitted to the Board of Investment with the analyses and supporting documents.

In each case of supplier’s credit/loan from abroad approved by BOI, a copy of the loan agreement should be forwarded by the concerned AD to ‘External Debt and Grant Section’, Foreign Exchange Policy Department, Bangladesh Bank, Head Office, Dhaka.

However, short term credit accommodations of up to one year duration from suppliers/buyers abroad are, however, subject to the guidelines/instructions issued by Bangladesh Bank in regard to settlements for current commercial transactions.

CHAPTER 16 ARTICLE 4(B): TERM LENDING IN TAKA TO FOREIGN OWNED/ CONTROLLED COMPANIES. REF: FEPD CIRCULAR NO. 12 DATED 11.03.2014, FEPD CIRCULAR NO. 04 DATAD 25.04.2012.

Term loans in Taka for capacity expansion/BMRE of foreign owned/controlled industrial firms may be extended/renewed by banks without prior Bangladesh Bank approval provided that:

(i) the term loan in Taka does not exceed, as percentage of total term borrowing, the percentage of equity of the firm/company held by Bangladesh nationals and firms/companies not owned or controlled by foreigners, and

(ii) total debt of the firm/company does not exceed the 50:50 debt equity ratio.

The prevailing credit norms and regulatory provisions regarding lending including single party exposure limits etc. will have to be duly complied with, and the term loan facilities extended will have to be reported post facto to General Manager, Foreign Exchange Investment Department (FEID), Bangladesh Bank, Head Office, Dhaka in proforma prescribed at Appendix 5/75. Term borrowing proposals not conforming with the stipulations in the above paragraph may as before be forwarded to General Manager, Foreign Exchange Policy Department (FEPD), Bangladesh Bank, Head Office, Dhaka for consideration and specific decision.

Besides, if requested, Bangladesh Bank may give consent to term borrowing proposals not conforming with the stipulations in above.

CHAPTER 16 ARTICLE 5(B): PURCHASE OF USANCE BILLS. REF: FEPD CIRCULAR NO. 18 DATED 27.09.2010.

Purchases by the ADs of usance bills covering imports into Bangladesh result in the payment by them in foreign currency or a payment in Taka to a non-resident account, whereas, they do not receive payment for the bills from the importer pending maturity and thus the transactions result in the extension of credit facilities to the importer in Bangladesh. ADs may extend such facilities to foreign owned or controlled firms on banker customer relationship and normal banking practices.

CHAPTER 16 ARTICLE 8: Guarantees on behalf of residents in favour of non-residents. REF: FEPD CIRCULAR NO. 02 DATED 13.01.2014.

ADs may furnish guarantees to non-residents on behalf of residents only within the authority set out.

CHAPTER 16 ARTICLE 11: GUARANTEE FAVOURING LOCAL PROJECT AUTHORITIES ON BEHALF OF RESIDENTS.. REF: FEPD CIRCULAR NO. 18 DATED 16.04.2014.

ADs may issue, on behalf of residents, bid bonds/performance bonds/guarantees in foreign currency in favour of local project authorities against goods/services procurement tenders financed by international/foreign donor agencies, on the condition that in case the guarantee is invoked the claim there against would be paid only in Taka equivalent and not in any other currency.

CHAPTER 16 ARTICLE 13: GUARANTEES AND PLEDGING OF COLLATERAL IN FAVOUR OF OVERSEAS BANK BRANCHES AND CORRESPONDENTS. REF: FEPD CIRCULAR NO. 06 DATED 30.01.2014.

ADs may not, without prior approval of Bangladesh Bank, furnish guarantees to or hold collaterals on behalf of overseas bank branches or correspondents in respect of credit facilities or guarantees to be extended by them or for any other purpose. All applications to Bangladesh Bank should be made by letters giving details of the purpose for which guarantee is to be furnished or collateral deposited. Prior approval is not however, necessary in cases where the ADs are satisfied that the amount of the fixed deposit or other collateral held by them represents funds remitted to Bangladesh through normal banking channel from the country of residence of the borrower.