Bangladeshi importers allowed to provide guarantees to foreign lenders

The Bangladesh Bank has recently allowed importers to provide corporate, personal or third party guarantees to foreign lenders making payments to suppliers under buyer credit against imports on sight letters of credit to facilitate short-term financing of imports under a buyer’s credit, a loan facility provided to an importer by a foreign lender to finance the purchase of capital goods, services and other items.

The total value of import letters of credit (LC) opened by licensed concessionary banks between July 2021 and May 2022 was 43.10% higher than the same period of the previous year.

The Bangladesh Bank has allowed importers to extend corporate, personal or third party guarantees to foreign lenders who make payments to suppliers under buyer credit against imports on sight letters of credit to facilitate short term financing import term under buyer’s credit, a loan from a foreign lender to finance the purchase of capital goods and services.

Imported LCs were worth $84,852.07 million during this period and $59,297.49 million during the same period a year earlier, according to a central bank press release.

The value of letters of credit settled between July 2021 and May 2022 amounted to $75,133.30 million, or 47.59% more than the same period of the previous year (50,907.04 million billion), Bangladeshi media reported.

Fibre2Fashion (DS) News Desk

Comments are closed.