Dhaka: Bangladesh Bank (BB) has allowed Offshore Banking Units (OBUs) to extend trade finance to enterprises other than fully foreign-owned ones located in specialized zones. The central bank also permitted OBUs to enlarge trade finance coverage for enterprises in non-specialized zones.
According to Bangladesh Sangbad Sangstha, BB issued a circular urging all relevant constituents to be informed of these amendments. In the circular, BB stated that OBUs may now extend trade finance to enterprises other than fully foreign-owned ones in specialized zones. This can be 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.
The circular further explained that financing arrangements may also be organized through ADs of other banks, subject to comprehensive risk assessment, including counterparty exposure and limit evaluation. Such financing must adhere to existing prudential credit norms and due diligence requirements.
Additionally, BB highlighted that OBUs may extend trade finance to enterprises located in non-specialized zones, arranged through ADs of their own bank. This can also be in the form of admissible buyer's credit, accepted bill financing, and other permissible instruments for the allowable tenure. Similar to specialized zones, financing arrangements may be made through ADs of other banks, subject to comprehensive risk assessment and compliance with prudential credit norms and due diligence requirements.