Summary

Banks in Bangladesh do not require any permission from Bangladesh Bank to process import payments for internet bandwidth and other related services from now on. The central bank already issued a circular that allows banks to make payments abroad without requiring its permission. However, banks must maintain some specifications, like obtaining applications from importers, which include required documents, invoices, tax payments, and an undertaking. Along with this, the bank can now issue guarantees against letters of credit, purchase/sale contracts, work orders, and advance payments. 

Context

Bangladesh Bank released a circular that permits banks to send money overseas without requesting permission from it. From now on, banks in Bangladesh can make import payments for internet bandwidth and other related services without obtaining approval from the central bank. 

However, this circular imposes certain requirements on the banks. Banks must obtain requesting applications from the relevant importers along with the necessary documents, including valid licenses, copies of agreements with related parties, and a copy of regulatory approval from the Bangladesh Telecommunication Regulatory Commission (BTRC).

Banks need to collect documentation such as relevant invoices and proof of tax payments. Additionally, an undertaking will be obtained from the applicant by the bank clearly stating that the money will be restored to the country in case of an incorrect or excessive payment.

The decision was welcomed by business insiders. According to them, it will simplify the process of bandwidth and related service imports. 

In a different circular, BB allowed banks to provide guarantees on behalf of Bangladeshi suppliers to international agencies that are requesting tenders for supply of goods and services. Banks won’t need the central bank’s approval for this case either. 

Along with this, the bank can now issue guarantees against letters of credit, purchase/sale contracts, work orders, and advance payments on behalf of resident exporters or subcontractors.

Picture and Article Source:  The Daily Star