Bangladesh Bank has extended the period of late payment (useance) facility for the import of industrial raw materials, agricultural inputs and fertilizers.
According to the new decision, foreign sellers can open letters of credit (LC) with a maximum payment term of 270 days for the import of these products.
On Monday (December 29), the Foreign Exchange and Policy Department of Bangladesh Bank issued a circular in this regard and sent it to the authorized dealer (AD) banks.
The central bank said that earlier this facility was effective for a maximum of 360 days till December 31, 2025.
However, according to the revised instructions, now the useance period will be a maximum of 270 days or the customer’s cash conversion cycle, whichever is less. In this case, no specific end date has been set; rather, the facility will remain in effect permanently.
The circular further states that before granting the use-case facility, the concerned bank will have to verify the customer’s previous business activities and transaction history and ensure whether the prescribed cash conversion cycle is realistic or not.
In the case of back-to-back LC, the use-case period will be determined in line with the prescribed period for repatriation of export proceeds.
However, this extended use-case facility will not be applicable to imports financed under Export Development Fund (EDF) loans.
This decision of Bangladesh Bank is being viewed as positive by business leaders and industry stakeholders. According to them, since the facility is permanent, there will be no need to extend the period repeatedly, thus making import-export activities easier and more normal.
